The Costing System Is the Part of the Accounting Information

question 53

True/False

The costing system is the part of the accounting information system that is common to both financial and management accounting.

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Definitions:

Cost Flow Assumptions

An accounting method that determines the cost of goods sold and ending inventory based on the presumed flow of inventory costs.

Cost-to-Retail Ratio

A method used in retail to calculate the cost of goods sold based on the ratio of the cost of goods available for sale to the retail price of the goods.

Retail Inventory Method

An accounting method used by retailers to estimate inventory levels by incorporating the cost to retail price ratio.

Sales Discounts

Reductions in the price of goods or services offered to customers, typically as an incentive to encourage prompt payment.