Using These Abbreviations--DL = Direct Labor, MO = Manufacturing Overhead

question 80

Multiple Choice

Using these abbreviations--DL = Direct Labor, MO = Manufacturing Overhead, DM = Direct Materials, WIP = Work-in-Process, FG = Finished Goods, COGS = Cost of Goods Sold--how would you represent the flow of manufacturing costs through the accounts? (Use + to mean "add to" and → to mean "is transferred to.")

• A)DL + MO → WIP → DM → COGS
• B)DM + DL + MO → WIP → FG → COGS
• C)WIP → FG → COGS
• D)DM + DL → WIP + MO → FG → COGS
• E)none of the above

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is globally accepted for financial reporting.

GAAP

Generally Accepted Accounting Principles (GAAP) are a set of accounting standards used to prepare and report financial statements.

Fair Value

The market-based measurement of the value of an asset or liability, used for financial reporting purposes.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the financial reporting activities of companies worldwide.