In a process costing system,costs flow from one Work in Process Inventory account to the next in the same sequence as:
A)Units flow through production.
B)In a LIFO periodic inventory system.
C)Shipped to customers.
D)In a job order cost system.

Question

Quizplus · Accepted Answer

In a process costing system, costs flow from one Work in Process Inventory account to the next in the same sequence as units flow through production. This means that each department or process has its own Work in Process Inventory account, and costs are added to the account as the units move through that process. As the units move to the next process or department, the costs are transferred to the next Work in Process Inventory account, until they finally reach Finished Goods Inventory. Therefore, option A is the correct answer. Option B is incorrect because it refers to a LIFO periodic inventory system, which is not relevant to process costing. Option C is incorrect because it refers to the point at which goods are shipped to customers, which is also not relevant to process costing. Option D is incorrect because it refers to a job order cost system, which is a different type of costing system altogether.

In a Process Costing System,costs Flow from One Work in Process