Gatherer,Inc.uses a process costing system.It prepares a production cost report for each processing department.How will the managers of Gatherer 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

Production cost reports for each processing department provide information on the cost of goods produced and the units of products completed during the period. This information is used to determine the balance of inventory accounts, which are reported on the balance sheet at the end of the accounting period. Therefore, the managers of Gatherer will use these reports to determine the value of inventory on the balance sheet.