The Second Step in the Analytical Phase of Accounting Is

question 54

Multiple Choice

The second step in the analytical phase of accounting is

• A) to determine whether there is an increase or a decrease in the accounts.
• B) to determine which accounts are involved.
• C) to formulate the entry as a debit to one account and as a credit to another account.
• D) to identify the classification of the accounts involved.
• E) none of these.

---

Definitions:

Materials Costs

The total expense incurred to acquire raw materials that are directly used in the production of goods or services.

Overhead

describes the ongoing business expenses not directly attributed to creating a product or service, including rent, utilities, and insurance.

Job Order Costing

A costing method used in manufacturing where costs are assigned to specific orders, batches, or lots.

Process Costing

A costing method used where similar products are manufactured in a continuous process. It assigns average costs to each unit, making it ideal for industries like refining or manufacturing.