In a Process Costing System That Uses Equivalent Units of Production,the

question 59

True/False

In a process costing system that uses equivalent units of production,the per-unit cost of direct materials equals the total cost of materials used in the current month divided by the number of units completed and transferred during the current month.

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Definitions:

Allowance for Doubtful Accounts Method

The allowance for doubtful accounts method involves estimating and deducting the amount of receivables that may not be collected from the accounts receivable balance.

Accounts Receivable

Pending payments to a company from its customers for merchandise or services that have already been given.

Allowance Method

An accounting technique used to estimate and account for bad debts expense, building an allowance for doubtful accounts.

Bad Debts Expense

The cost associated with accounts receivable that a company cannot collect and thus writes off as a loss.