Select the Incorrect Statement Regarding Cost Flows Through a Process

question 115

Multiple Choice

Select the incorrect statement regarding cost flows through a process costing system.

• A) The process costing system is patterned after the physical flow of products as they move through the production process.
• B) The three inventory accounts used are maintained on a perpetual basis.
• C) Product costs are accumulated separately by job.
• D) A separate Work in Process account is maintained for each department or process.

---

Definitions:

Profit

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining the activity.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts and/or the physical factors of production including machinery and buildings.

Resource Owners

Individuals or entities that hold legal rights or control over natural, human, or capital resources, enabling them to use or allocate them.

Wind Farms

Areas equipped with large numbers of wind turbines used to generate electricity.