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Chapter 2--Job Order Costing Key 1. Cost accounting systems are used to supply cost data information on costs incurred by a manufacturing process or department. TRUE 2. A manufacturer may employ a job order cost system for some of its products and a process cost system for others. TRUE 3. A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory. TRUE 4. A process cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory. FALSE 5. A process cost accounting system accumulates costs for each of the departments or processes within the factory. TRUE 6. A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process. TRUE 7. The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications. FALSE 8. A job order cost system would be appropriate for a crude oil refining business. FALSE 9. A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead. TRUE 10. The job order costing system is not used by service organizations. FALSE 11. The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit. TRUE 12. Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in cost accounting systems. TRUE 13. When the goods are sold, their costs are transferred from Work in Process to Finished Goods. FALSE 14. The materials requisition serves as the source document for debiting the accounts in the materials ledger. FALSE 15. Materials are transferred from the storeroom to the factory in response to materials requisitions. TRUE 16. The document that serves as the basis for recording direct labor on a job cost sheet is the time card. FALSE 17. The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket. TRUE 18. Depreciation expense on factory equipment is part of factory overhead cost. TRUE 19. Factory overhead is applied to production using a predetermined overhead rate. TRUE 20. If factory overhead applied exceeds the actual costs, the factory overhead account will have a credit balance. TRUE 21. If factory overhead applied exceeds the actual costs, overhead is said to be underapplied. FALSE 22. If the underapplied factory overhead amount is material, it is transferred to Cost of Goods Sold at the end of the fiscal year. FALSE 23. If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year. TRUE 24. Each account in the cost ledger in a job order system is called a job cost sheet. TRUE 25. In the job order system, the finished goods account is the controlling account for the factory overhead ledger. FALSE 26. The inventory accounts generally maintained by a manufacturing firm are only finished goods and materials. FALSE 27. Generally accepted accounting principles require companies to use only one factory overhead rate for product costing. FALSE 28. Activity-based costing is a method of accumulating and allocating costs by department. FALSE 29. Interim financial statements for a manufacturing business would report overapplied factory overhead as a deferred item on the balance sheet. TRUE 30. The debit to factory overhead for the cost of indirect materials is obtained from the summary of the materials requisitions. TRUE Why is this page out of focus?This is a Premium document. Become Premium to read the whole document. Why is this page out of focus?This is a Premium document. Become Premium to read the whole document. Why is this page out of focus?This is a Premium document. Become Premium to read the whole document. Why is this page out of focus?This is a Premium document. Become Premium to read the whole document. Which of the following would probably not be found in the accounting system of a service provider?The correct answer is option B) Finished jobs ledger . There is no such thing as a finished job ledger. The accounting system of a service provider is most probably uses a method of job costing and the ledgers involved are cost ledger and job cost sheets.
What is each account in the cost ledger called?Every document in a cost ledger is called a job cost sheet, and it includes all the costs incurred to complete the job. The controlling account for a job cost sheet is work-in-process and not materials, cost of goods sold, or finished goods.
Which document in the cost ledger is called a?each document in the cost ledger is called a. job cost sheet. Work in process: 1 balance= 275000.
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Which of the following would not be found in the accounting system of a service provider?
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