Quince,Inc.uses a process costing system.It prepares a production cost report for each processing department.How will the managers of Quince use these production cost reports to prepare the balance sheet at the end of an accounting period?
A) to determine the amount of current liabilities of the period
B) to determine the balance of inventory accounts
C) to determine the cost of goods sold during the period
D) to determine the amount of revenues generated during the period

Question

Quizplus · Accepted Answer

The production cost reports for each processing department will provide information on the cost of goods manufactured during the period. This information will be used by the managers to determine the balance of inventory accounts on the balance sheet at the end of the accounting period. This is because process costing system accumulates costs by department or process, and therefore, the production cost reports will show the cost of production for each department or process, which can be used to value the ending inventory for that department or process.