Accountancy MCQs
Topic Notes: Accountancy
General Description
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
1
What is the accounting term for inventory consisting of goods that are currently in the production process but not yet complete?
Answer:
work in process inventory
Work in process (WIP) inventory represents the value of goods that have entered the production cycle but have not yet reached the stage of being finished products. This inventory account includes the accumulated costs of direct materials, direct labor, and allocated manufacturing overhead applied to these incomplete units at the end of an accounting period.
2
Which category of inventory is most commonly associated with a service-oriented business model?
Answer:
Work in process inventories
Service businesses do not typically hold finished goods or raw materials for resale. However, they often have 'work in process' inventory, which represents the cost of services that have been initiated but not yet completed or billed to the client at the end of the accounting period.