Question

1.

The perpetual inventory method cannot be used in a job order cost system.

True

False

2. A job order cost system and a process cost system are two alternative methods for valuing inventories.

True

False

3. Accumulating and assigning manufacturing costs are two important activities in a job order cost system.

True

False

4. When raw materials are purchased, the Work in Process Inventory account is debited.

True

False

5. Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory.

True

False

6- In a job order cost system, each entry to the Work In Process Inventory account should be accompanied by a posting to one or more job cost sheets.

True

False

Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.

True

False

7- Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs.

True

False

8-

Labor costs are debited to Work in Process Inventory when they are incurred.

True

False

9- When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs.

True

False

10. The two basic types of cost accounting systems are

job order and job accumulation systems.

job order and batch systems.

job order and process cost systems.

process cost and batch systems.

Answer 1

Answers to the above mentioned questions :

1.

The perpetual inventory method cannot be used in a job order cost system.

False : The perpetual inventory method can be used anywhere wheather it is a job order cost system or process cost system.

2.

A job order cost system and a process cost system are two alternative methods for valuing inventories.

True : It is true that job order cost system and a process cost system are two alternative methods for valuing inventories.

3.

Accumulating and assigning manufacturing costs are two important activities in a job order cost system.

True : The two important activities in a job order cost system are only Accumulating and assigning manufacturing costs

4.

When raw materials are purchased, the Work in Process Inventory account is debited.

False : It is so because whenever raw material is purchased it is first debited to Stores Inventory account as it is first sent to stores and then allowed to Work in Process.

5.

Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory.

True : As Job order cost sheets are the sheets containing all the information about a specific job cost and is subsidiary ledger of the control account Work In Process Inventory.

6.

In a job order cost system, each entry to the Work In Process Inventory account should be accompanied by a posting to one or more job cost sheets.

True : It is because each entry have double effect and should be accompanied by a posting to one or more job cost sheets.

Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.

False : This is no so in case of Actual manufacturing overhead costs.

7.
Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs.

False : Overapplied overhead actually means that manufacturing overhead costs were smaller/less than the manufacturing overhead costs applied to jobs.

8.
Labor costs are debited to Work in Process Inventory when they are incurred.

False : Labour costs are manufacturing costs or production costs so, they cannot be debited to Work in Process Inventory when they are incurred.

9.
When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs.

True : It is so because raw material is purchased in bulk and at the time of purchase it is not associated to specific jobs at this point of purchase.

10.
The two basic types of cost accounting systems are

The correct answer is OPTION C i.e job order and process cost system. As these are the only two basic types of cost accounting systems.