Which of the following statements is not true regarding costing for services?
A) Generally, the use of process costing techniques for service organizations is easier than it is for manufacturing organizations because services generally cannot be inventoried.
B) Process costing for services is similar to job costing for batches in that an average cost for similar or identical services performed during a given time period.
C) The difficulty in many service situations is defining the appropriate cost objective.
D) In process costing, the amount of goods completed always increases finished goods inventory.

Question

Quizplus · Accepted Answer

Since services completed cannot be held in inventory from one period to the next, the cost of services completed during the period is always accompanied by an increase in Cost of Goods (Services) Sold, not an increase in Finished Goods Inventory.

Which of the Following Statements Is Not True Regarding Costing