Cost Accounting Systems - True/False Worksheet

Cost accounting systems accumulate production costs and then assign them to products and services.

• true

• false

A company that uses a cost accounting system normally has only two inventory accounts: Finished Goods Inventory and Work in Process Inventory.

• true

• false

There are two basic types of cost accounting systems: job order costing and custom order costing.

• true

• false

Two basic types of cost accounting systems are job order costing and process costing.

• true

• false

A company that produces a high volume of standardized units would normally use a job order costing system.

• true

• false

A company that produces products that are individually designed to meet the needs of a specific customer would normally use a job order costing system.

• true

• false

Job order costing would be appropriate for companies that produce custom homes and specialized equipment.

• true

• false

Job order costing would be appropriate for companies that produce pencils.

• true

• false

A job order costing system would be appropriate for a manufacturer of automobile tires.

• true

• false

Job order costing would be appropriate for companies that produce custom-made furniture.

• true

• false