The Process That Accumulates Production Costs by Process and Uses

question 91

Multiple Choice

The process that accumulates production costs by process and uses a work-in-process account for each process is called:

• A) Process costing
• B) Joint costing
• C) Variable costing
• D) Job-order costing

---

Definitions:

Operating Activities

Operating activities involve the primary revenue-generating activities of an entity, as reflected in its profits or losses from core operations.

Depreciation

The method of allocating the cost of a tangible asset over its useful life, reflecting the loss of value over time.

Accounts Payable

Liabilities to creditors for goods, services, or supplies delivered or used in the earning process but not yet paid for.

Free Cash Flow

A financial measure representing the amount of cash generated by a business that is available for distribution to its security holders after accounting for reinvestment in assets.