Both Job Order and Process Cost Accounting Use Equivalent Units

question 132

True/False

Both job order and process cost accounting use equivalent units of production to determine costs.

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Definitions:

Merchandise Inventory

Items that a company intends to sell to customers that are held as assets on the balance sheet.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Retail Inventory Method

An accounting method used by retailers to estimate inventory cost by using a cost-to-retail price ratio based on both beginning inventory and purchases during the period.

Ending Inventory

The total value of all inventory a company has available for sale at the end of an accounting period.