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For a firm that uses process costing, calculating equivalent units makes it possible to fulfill which...

For a firm that uses process costing, calculating equivalent units makes it possible to fulfill which of the following requirements of GAAP?

1) Assigning an appropriate value to assets

2) Assigning an appropriate value to liabilities

3) Expensing period costs as they are incurred

4( Recognizing revenue when it is realized or realizable

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Answer #1

ANSWER IS OPTION 3--Expensing period costs as they are incurred

Explanation :Equivalent units is a cost accounting concept that is used in process costing for cost calculations which shows number of completed units of an item that a company could theoretically have produced, given the amount of materials, labor, and manufacturing overhead costs incurred during that particular period for the items not yet completed.

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