Test Bank for Accounting Principles Process Cost Accounting NR067 Latest 2026–2027 Updated. Verified Questions and Answers for Chapter Coverage and Concept Mastery. Complete Practice Resource for Exams and High Academic Performance.

CHAPTER 21 L




PROCESS COST ACCOUNTING L L




SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
L L L L L L L L




Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT
True-False Statements L


sg
1. 1 K 9. 4 K 17. 6 K 25. 7 K 33. 3 C
L L L L
sg L

2. 1 K L
10. 4 K L
18. 6 C 26. 8 K 34. 4 K
sg
3. 1 C 11. 4 K 19. 6 L
27. 8 L
35. 5 L




4. 2 L
12. 5
L

20. 6 K L
28. 8 K sg
36. 6 K
C C K
L L



5. 2 L 13. 5 L
21. 6 L
29. 9 K sg
37. 9 K
K K L C a
L L


6. 2 L
14. 5 22. 6 L 30. 10 K K
K K L
K sg L

7. 2 L
15. 5 23. 7 L
31. 1 K
K K K sg
8. 4 16. 5 24. 7 32. 2 L



C AP K K
K
Multiple Choice Questions L L




38. 1 C L 59. 5 AP 80. 6 AP 101. 6 C L 123. 9 C L
L L

39. 1 C L 60. 5 AP 81. 6 AP 102. 6 AP 124. 9 C L
L

40. 1 K L 61. 5 K 82. 6 L
103. 6 AP 125. 9 C L
L L
AP
41. 1 K L 62. 5 AP 83. 6 L 104. 6 L
126. 9 K L



42. 1 63. 5 84. 6 AP 105. 6 AP 127. 9
K L
L
L K L



43. 2 64. 5 AP 85. 6
L

106. 6 AP a
128. 10
C L L AP L
K L


44. 2 K 65. 5 AP 86. 6 L
107. 6 AP
a
129. 10 K
L
AP L


45. 2 C 66. 5 C L L
87. 6 L
108. 6 L st
130. 1 K
L

AP AP L



46. 2 K L 67. 5 AP 88. 6 L
110. 6 L
sg
131. 2 K L


47. 2 K 68. 5
L

89. 6 AP 111. 6 AP st
132. 2 K
L AP L
L L

sg
48. 2 C 69. 5 L
90. 6 AP 112. 6 AP 133. 5 K
L
AP L
sg
L


49. 2 K L 70. 5 L
91. 6 L
113. 6 AP 134. 5 K L

AP AP st
50. 4 C L 71. 5 92. 6 114. 7 L
135. 5 K L
L
C L L AP sg
51. 4 C L 72. 5 AP 93. 6 115. 7 L 136. 6 AP
L C L
AP st
52. 4 C L 73. 5 AP 94. 6 116. 7 137. 6 K L L
AP K sg
53. 4 C L 74. 5 L
95. 6 117. 8 L L
138. 6 C L
AP K L L
K sg
54. 4 K L 75. 5 L 96. 6 118. 8 L
139. 6 AP
AP AP K st
55. 4 C L 76. 6 L
97. 6 L 119. 8 L
140. 6 K
L L


56. 5 AP 77. 6 AP 98. 6 AP 120. 8 C L sg
141. 7 K L
L


57. 5
L

78. 6
L

99. 6 AP 121. 8 C L sg
142. 8 K
AP AP
58. 5 79. 6 L
100. 6
L
122. 9 K L
AP AP AP
L
L C L



AP AP C
L
L

AP C
AP
AP AP
Brief Exercises L




143. 5 AP 145. 5 AP 147. 6 AP 149. 6 AP 151. 6 AP
144. 5 L 146. 6 L 148. 6 L 150. 6 L 152. 6 L



AP AP AP AP AP
sg
L This question also appears in the Study Guide.
L L L L L L L

st
L This question also appears in a self-test at the student companion website.
L L L L L L L L L L L

a
L L This topic is dealt with in an Appendix to the chapter.
L L L L L L L L L L

,21 - 2 Test Bank for Accounting Principles, Eighth Edition

SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
L L L L L L L L




Exercises
153. 4 AP
L
158. 5 AP
L
163. 5,6 AP
L
168. 6 AP
L
173. 7 AP
154. 4 AP 159. 5 AP 164. 5,6 AP 169. 6 AP
155. 4 L
160. 5,6 L
165. 5,6 L
170. 7 L




156. 4 AP
L 161. 5,6 AP
L 166. 5,6 AP
L 171. 7 AP
L



157. 4 AP 162. 5,6 AN 167. 6 AP 172. 7 AP
AP AP AP AP
Completion Statements L



a
174. 1 K
L
177. 4 K
L
180. 6 AP 183. 8 K
L
186. 10 K
175. 2 K 178. 5 K 181. 6 K L 184. 9 K
176. 2 K 179. 6 K 182. 7 K 185. 9 K


SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
L L L L L L




Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Study Objective 1
L L




1. TF 3. TF 38. MC 40. MC 42. MC 174. C
2. TF 31. TF 39. MC 41. MC 130. MC
Study Objective 2
L L




4. TF 7. TF 44. MC 47. MC 131. MC 176. C
5. TF 32. TF 45. MC 48. MC 132. MC
6. TF 43. MC 46. MC 49. MC 175. C
Study Objective 3
L L




33. TF
Study Objective 4
L L




8. TF 11. TF 51. MC 54. MC 153. Ex 156. Ex
9. TF 34. TF 52. MC 55. MC 154. Ex 157. Ex
10. TF 50. MC 53. MC 133. MC 155. Ex 177. C
Study Objective 5
L L




12. TF 56. MC 62. MC 68. MC 74. MC 145. BE 163. Ex
13. TF 57. MC 63. MC 69. MC 75. MC 158. Ex 164. Ex
14. TF 58. MC 64. MC 70. MC 134. MC 159. Ex 165. Ex
15. TF 59. MC 65. MC 71. MC 135. MC 160. Ex 166. Ex
16. TF 60. MC 66. MC 72. MC 143. BE 161. Ex 178. C
35. TF 61. MC 67. MC 73. MC 144. BE 162. Ex
Study Objective 6
L L




17. TF 79. MC 89. MC 99. MC 109. MC 146. BE 163. Ex
18. TF 80. MC 90. MC 100. MC 110. MC 147. BE 164. Ex
19. TF 81. MC 91. MC 101. MC 111. MC 148. BE 165. Ex
20. TF 82. MC 92. MC 102. MC 112. MC 149. BE 166. Ex
21. TF 83. MC 93. MC 103. MC 113. MC 150. BE 167. Ex
22. TF 84. MC 94. MC 104. MC 136. MC 151. BE 168. Ex
36. TF 85. MC 95. MC 105. MC 137. MC 152. BE 169. Ex
76. MC 86. MC 96. MC 106. MC 138. MC 160. Ex 179. C
77. MC 87. MC 97. MC 107. MC 139. MC 161. Ex 180. C
78. MC 88. MC 98. MC 108. MC 140. MC 162. Ex 181. C

, Process Cost Accounting 21 - 3

Study Objective 7 L L




23. TF 25. TF 115. MC 141. MC 171. Ex 173. Ex
24. TF 114. MC 116. MC 170. Ex 172. Ex 182. C
Study Objective 8 L L




26. TF 28. TF 118. MC 120. MC 142. MC
27. TF 117. MC 119. MC 121. MC 183. C
Study Objective 9 L L




29. TF 122. MC 124. MC 126. MC 184. C
37. TF 123. MC 125. MC 127. MC 185. C
Study Objective a10 L L


a a a
30. TF 128. MC 129. MC a186. C
Note: L L TF = True-False
L BE = Brief Exercise
L L L C = L L


Completion
MC = Multiple Choice
L L Ex = Exercise
L L




The chapter also contains one set of ten Matching questions and four Short-Answer
L L L L L L L L L L L L L



Essay questions.
L




CHAPTER STUDY OBJECTIVES L L




1. Understand who uses process cost systems. Process! cost! systems! are! used! by!
L L L L L L L L L L L L



companies! that! mass-produce! similar! products! in! a! continuous! fashion.! Once! production!
L L L L L L L L L L L



begins it! continues! until! the! finished! product! emerges.! Each! unit! of! finished! product! is!
L L L L L L L L L L L L L L



indistinguishable! from! every! other! unit. L L L L




2. Explain! the! similarities! and! differences! between! job! order! cost! and! process! cost!
L L L L L L L L L L L L



systems. ! Job! order! cost! systems! are! similar! to! process! cost! systems! in! three! ways:! (1)!
L L L L L L L L L L L L L L L



Both! systems! track! the! same! cost! elements—direct! materials direct! labor and!
L L L L L L L L L L L



manufacturing! overhead.! (2)! Costs! are! accumulated! in! the! same! accounts—Raw! L L L L L L L L L L



Materials! Inventory Factory! Labor and! Manufacturing! Overhead.! (3)! Accumulated! costs!
L L L L L L L L L L



are! assigned! to! the! same! accounts—Work! in! Process Finished! Goods! Inventory and!
L L L L L L L L L L L L



Cost! of! Goods! Sold.! However the! method! of! assigning! costs! differs! significantly.
L L L L L L L L L L L




There! are! four! main! differences! between! the! two! cost! systems:! (1)! A! process! cost! system!
L L L L L L L L L L L L L L L



uses! separate! accounts! for! each! production! process! department! or! manufacturing! process
L L L L L L L L L L L



rather! than! only! one! work! in! process! account! used! in! a! job! order! cost! system.! (2)! In! a!
L L L L L L L L L L L L L L L L L L



process! cost! system costs! are! summarized! in! a! production! cost! report! for! each!
L L L L L L L L L L L L L



department.! In! a! job! cost! system costs! are! charged! to! individual! jobs! and! summarized! in!
L L L L L L L L L L L L L L L



a! job! cost! sheet.! (3)! Costs! are! totaled! at! the! end! of! a! time! period! in! a! process! cost!
L L L L L L L L L L L L L L L L L L L



system but! at! the! completion! of! a! job! in! a! job! cost! system.! (4)! In! a! process! cost! system
L L L L L L L L L L L L L L L L L L L



unit! cost! is! calculated! as:! Total! manufacturing! costs! for! the! period! ÷! Units! produced!
L L L L L L L L L L L L L L



during! the! period.! In! a! job! cost! system unit! cost! is:! Total! cost! per! job! ÷! Units! produced.
L L L L L L L L L L L L L L L L L




3. Explain! the! flow! of! costs! in! a! process! cost! system.! Manufacturing! costs! for! raw!
L L L L L L L L L L L L L L



materials labor and! overhead! are! assigned! to! work! in! process! accounts! for! various!
L L L L L L L L L L L L L



departments! or! manufacturing! processes.! The! costs! of! units! completed! are! transferred!
L L L L L L L L L L L



from! one! department! to! another! as! those! units! move! through! the! manufacturing! process.!
L L L L L L L L L L L L L



The! costs! of! completed! work! are! transferred! to! Finished! Goods! Inventory.! When!
L L L L L L L L L L L L



inventory! is! sold costs! are! transferred! to! Cost! of! Goods! Sold.
L L L L L L L L L L

, 21 - 4 Test Bank for Accounting Principles, Eighth Edition

4. Make! the! journal! entries! to! assign! manufacturing! costs! in! a! process! cost! system.!
L L L L L L L L L L L L L



Entries! to! assign! the! costs! of! raw! materials labor and! overhead! consist! of! a! credit! to! Raw!
L L L L L L L L L L L L L L L L L



Materials! Inventory Factory! Labor and! Manufacturing! Overhead and! a! debit! to! Work! in!
L L L L L L L L L L L L L



Process! for! each! department.! Entries! to! record! the! cost! of! good! transferred! to! another!
L L L L L L L L L L L L L L



department! are! a! credit! to! Work! in! Process! for! the! department! whose! work! is! finished!
L L L L L L L L L L L L L L L



and! a! debit! to! the! department! to! which! the! goods! are! transferred.! The! entry! to! record!
L L L L L L L L L L L L L L L L



units! completed! and! transferred! to! the! warehouse! is! a! credit! for! the! department! whose!
L L L L L L L L L L L L L L



work! is! finished! and! a! debit! to! Finished! Goods! Inventory.! The! entry! to! record! the! sale! of!
L L L L L L L L L L L L L L L L L



goods! is! a! credit! to! Finished! Goods! Inventory! and! a! debit! to! Cost! of! Goods! Sold.
L L L L L L L L L L L L L L L




5. Compute ! equivalent! units.! Equivalent! units! of! production! measure! work! done! during! a!
L L L L L L L L L L L L



period expressed! in! fully! completed! units.! This! concept! is! used! to! determine! the! cost! per!
L L L L L L L L L L L L L L L


unit! of! completed! product.! Equivalent! units! are! the! sum! of! the! units! completed! and!
L L L L L L L L L L L L L L



transferred! out! plus! equivalent! units! of! ending! work! in! process.
L L L L L L L L L




6. Explain! the! four! steps! necessary! to! prepare! a! production! cost! report.! The! four! steps!
L L L L L L L L L L L L L L



to! complete! a! production! cost! report! are:! (1)! Compute! the! physical! unit! flow—that! is the!
L L L L L L L L L L L L L L L



total! units! to! be! accounted! for.! (2)! Compute! the! equivalent! units! of! production.! (3)!
L L L L L L L L L L L L L L



Compute! the! unit! production! costs expressed! in! terms! of! equivalent! units! of! production.!
L L L L L L L L L L L L L



(4)! Prepare! a! cost! reconciliation! schedule which! shows! that! the! total! costs! accounted! for!
L L L L L L L L L L L L L L



equal! the! total! costs! to! be! accounted! for.
L L L L L L L




7. Prepare! a! production! cost! report.! The! production! cost! report! contains! both! quantity!
L L L L L L L L L L L L



and! cost! data! for! a! production! department.! There! are! four! sections! in! the! report:! (1)!
L L L L L L L L L L L L L L L



number! of! physical! units (2)! equivalent! units! determination (3)! unit! costs and! (4)! cost!
L L L L L L L L L L L L L L



reconciliation! schedule. L




8. Explain! just-in-time! (JIT)! processing.! JIT! is! a! manufacturing! technique! dedicated! to!
L L L L L L L L L L L



producing! the! right! products! at! the! right! time! as! needed.! One! of! the! principal! accounting!
L L L L L L L L L L L L L L L



effects! is! that! a! Raw! and! In-Process! Inventory! account! replaces! both! the! raw! materials!
L L L L L L L L L L L L L L



and! work! in! process! inventory! accounts.
L L L L L




9. Explain! activity-based! costing! (ABC).! ABC! is! a! method! of! product! costing! that! focuses!
L L L L L L L L L L L L L



on! the! activities! performed! to! produce! products.! It! assigns! the! cost! of! the! activities! to!
L L L L L L L L L L L L L L L



products! by! using! cost! drivers! that! measure! the! activities! performed.! The! primary!
L L L L L L L L L L L L



objective! of! ABC! is! accurate! and! meaningful! product! costs.
L L L L L L L L




a
10.! L Apply! activity-based! costing! to! specific! company! data.! In! applying! ABC it! is!
L L L L L L L L L L L L



necessary! to! compute! the! overhead! rate! for! each! activity! by! dividing! total! expected!
L L L L L L L L L L L L L



overhead! by! the! total! expected! usage! of! the! cost! driver.! The! overhead! cost! for! each!
L L L L L L L L L L L L L L L



activity! is! then! assigned! to! products! on! the! basis! of! each! product’s! use! of! the! cost! driver.
L L L L L L L L L L L L L L L L