Problem 4 (10 points total - 2 points each) Indicate whether each of the followi

Question

Problem 4 (10 points total - 2 points each) Indicate whether each of the following statements is true or talse. A process cost system does not use the same inventory accounts as a job-order cost system. A process cost system accumulates product costs by jobs or batches of products. A company using a process cost system would keep a work in process account for each production department 2. 3. 4 In a process cost system, the cost of raw materials used is debited to work in process. A company using job-order costing must maintain a separate work in process account for each department. 5. Problem 5 (10 points total - 2 points each) Indicate whether each of the following statements is true or false. Applying overhead costs to a job is an asset exchange transaction. The cost of finished goods in a job-order system includes the costs of direct materials, direct labor, and manufacturing overhead. 2. When goods are completed, an entry is made to decrease the balance finished goods inventory.. When a job is completed and transferred to finished goods, the job cost sheet accompanies the job. 4 The payment of wages to production employees is recorded on the statement of cash flows as a cash flow for investing activities if the goods have not yet been sold. 5. 10

Explanation / Answer

A) FALSE It uses the same inventory accounts which is work in process accounts but in process costing WIP account is maintained department or process wise and in job it is maintained per job wise. B) FALSE It accumulates cost by process C) TRUE in process costing WIP account is maintained department or process wise d) TRUE When material is introduced raw material is debited to work in process account. e) FALSE in job costing work in process inventory account is maintained per job wise.

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