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CHAPTER 2

JOB ORDER COST ACCOUNTING

Summary of Questions by Objectives and Bloom’s Taxonomy

Item / SO / BT / Item / SO / BT / Item / SO / BT / Item / SO / BT / Item / SO / BT
True-False Statements
1. / 1 / K / 9. / 2 / C / 17. / 3 / K / 25. / 5 / C / 33. / 3 / K
2. / 1 / C / 10. / 2 / C / 18. / 3 / K / 26. / 5 / K / 34. / 4 / C
3. / 1 / C / 11. / 2 / C / 19. / 3 / C / 27. / 5 / C / 35. / 2 / K
4. / 1 / C / 12. / 2 / C / 20. / 3 / C / 28. / 5 / K / 36. / 4 / C
5. / 1 / C / 13. / 2 / K / 21. / 3 / K / 29. / 6 / C
6. / 1 / K / 14. / 2 / C / 22. / 4 / C / 30. / 6 / C
7. / 1 / C / 15. / 2 / K / 23. / 4 / K / 31. / 2 / C
8. / 2 / K / 16. / 2 / K / 24. / 4 / C / 32. / 2 / C
Multiple Choice Questions
37. / 4 / C / 64. / 2 / C / 91. / 4 / C / 118. / 6 / C / 145. / 2 / AP
38. / 2 / C / 65. / 2 / C / 92. / 4 / K / 119. / 6 / C / 146. / 4 / C
39. / 6 / C / 66. / 2 / K / 93. / 4 / K / 120. / 6 / C / 147. / 3 / K
40. / 6 / C / 67. / 2 / C / 94. / 4 / C / 121. / 6 / C / 148. / 5 / AP
41. / 2 / C / 68. / 2 / K / 95. / 4 / AP / 122. / 6 / C / 149. / 6 / AP
42. / 1 / K / 69. / 2 / K / 96. / 4 / C / 123. / 6 / C / 150. / 2 / K
43. / 2 / K / 70. / 2 / AP / 97. / 4 / K / 124. / 6 / K / 151. / 1 / C
44. / 2 / C / 71. / 2 / K / 98. / 4 / C / 125. / 6 / C / 152. / 5 / K
45. / 3 / K / 72. / 2 / K / 99. / 4 / K / 126. / 6 / AP / 153. / 2 / C
46. / 2 / C / 73. / 2 / C / 100. / 4 / K / 127. / 6 / C / 154. / 3 / C
47. / 2 / C / 74. / 2 / C / 101. / 5 / C / 128. / 6 / C / 155. / 5 / AP
48. / 4 / C / 75. / 3 / K / 102. / 5 / AP / 129. / 6 / C / 156. / 6 / AP
49. / 2 / AP / 76. / 3 / AP / 103. / 5 / AP / 130. / 6 / K / 157. / 4 / AP
50. / 5 / C / 77. / 3 / K / 104. / 5 / AP / 131. / 6 / K / 158. / 1 / C
51. / 4 / C / 78. / 3 / C / 105. / 5 / C / 132. / 2 / C / 159. / 1 / C
52. / 1 / K / 79. / 3 / K / 106. / 5 / C / 133. / 2 / K / 160. / 5 / K
53. / 1 / K / 80. / 3 / K / 107. / 5 / AP / 134. / 1 / K
54. / 1 / C / 81. / 3 / K / 108. / 5 / AP / 135. / 1 / K
55. / 1 / C / 82. / 3 / C / 109. / 5 / C / 136. / 2 / K
56. / 1 / C / 83. / 3 / K / 110. / 5 / C / 137. / 2 / AP
57. / 1 / C / 84. / 3 / C / 111. / 5 / C / 138. / 2 / AP
58. / 1 / C / 85. / 3 / C / 112. / 5 / C / 139. / 5 / C
59. / 2 / K / 86. / 3 / K / 113. / 5 / C / 140. / 4 / AP
60. / 2 / K / 87. / 3 / AP / 114. / 5 / K / 141. / 5 / K
61. / 2 / C / 88. / 4 / C / 115. / 5 / K / 142. / 3 / K
62. / 2 / K / 89. / 4 / K / 116. / 6 / C / 143. / 2 / K
63. / 2 / C / 90. / 4 / C / 117. / 6 / C / 144. / 6 / K
Brief Exercises
161. / 2 / AP / 164. / 4 / AP / 167. / 2 / AP / 170. / 2 / AP
162. / 3 / AP / 165. / 6 / AP / 168. / 4 / AP / 171. / 6 / AP
163. / 2 / AP / 166. / 6 / AP / 169. / 2 / AP
Exercises
172. / 2-4 / C / 177. / 2-5 / AN / 182. / 3,5 / AP / 187. / 4,6 / AP / 192. / 2-3 / AP
173. / 2-4 / AP / 178. / 2-5 / AP / 183. / 3,5 / AP / 188. / 4,6 / AP / 193. / 2-6 / AP
174. / 2-4 / C / 179. / 2-6 / AP / 184. / 4 / AP / 189. / 5 / AP
175. / 2-5 / AP / 180. / 2-6 / AP / 185. / 4 / AP / 190. / 5 / AP
176. / 2-5 / AP / 181. / 3-5 / AN / 186. / 4,6 / AP / 191. / 2-5 / AP
Completion Statements
194. / 1 / K / 196. / 1 / K / 198. / 2 / K / 200. / 3 / K / 202. / 6 / K
195. / 1 / K / 197. / 2 / K / 199. / 3 / AP / 201. / 4 / K / 203. / 6 / K
Matching
2047. / 1-6 / K
Short Answer Essay
205. / 2 / C / 206. / 2-4 / C / 207. / 1-6 / E / 208. / 3-6 / E

SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE

Item / Type / Item / Type / Item / Type / Item / Type / Item / Type / Item / Type / Item / Type
Study Objective 1
1. / TF / 5. / TF / 52. / MC / 56. / MC / 135. / MC / 194. / C / 207. / Es
2. / TF / 6. / TF / 53. / MC / 57. / MC / 151. / MC / 195. / C
3. / TF / 7. / TF / 54. / MC / 58. / MC / 158. / MC / 196. / C
4. / TF / 42. / MC / 55. / MC / 131. / MC / 159. / MC / 204. / Ma
Study Objective 2
8. / TF / 32. / TF / 61. / MC / 71. / MC / 145. / MC / 174. / Ex / 197. / C
9. / TF / 35. / TF / 62. / MC / 72. / MC / 150. / MC / 175. / Ex / 198. / C
10. / TF / 41. / MC / 63. / MC / 73. / MC / 153. / MC / 176. / Ex / 204. / Ma
11. / TF / 43. / MC / 64. / MC / 74. / MC / 161. / BE / 177. / Ex / 205. / Es
12. / TF / 44. / MC / 65. / MC / 132. / MC / 163. / BE / 178. / Ex / 206. / Es
13. / TF / 46. / MC / 66. / MC / 133. / MC / 167. / BE / 179. / Ex / 207. / Es
14. / TF / 47. / MC / 67. / MC / 136. / MC / 169. / BE / 180. / Ex
15. / TF / 49. / MC / 68. / MC / 137. / MC / 170. / BE / 191. / Ex
16. / TF / 59. / MC / 69. / MC / 138. / MC / 172. / Ex / 192. / Ex
31. / TF / 60. / MC / 70. / MC / 143. / MC / 173. / Ex / 193. / Ex
Study Objective 3
17. / TF / 75. / MC / 82. / MC / 147. / MC / 176. / Ex / 183. / Ex / 206. / Es
18. / TF / 76. / MC / 83. / MC / 154. / MC / 177. / Ex / 191. / Ex / 207. / Es
19. / TF / 77. / MC / 84. / MC / 162. / BE / 178. / Ex / 192. / Ex
20. / TF / 78. / MC / 85. / MC / 172. / Ex / 179. / Ex / 193. / Ex
21. / TF / 79. / MC / 86. / MC / 173. / Ex / 180. / Ex / 199. / C
33. / TF / 80. / MC / 87. / MC / 174. / Ex / 181. / Ex / 200. / C
45. / MC / 81. / MC / 142. / MC / 175. / Ex / 182. / Ex / 204. / Ma
Study Objective 4
22. / TF / 51. / MC / 94. / MC / 140. / MC / 174. / Ex / 181. / Ex / 193. / Ex
23. / TF / 88. / MC / 95. / MC / 146. / MC / 175. / Ex / 184. / Ex / 201. / C
24. / TF / 89. / MC / 96. / MC / 157. / MC / 176. / Ex / 185. / Ex / 204. / Ma
34. / TF / 90. / MC / 97. / MC / 164. / BE / 177. / Ex / 186. / Ex / 206. / Es
36. / TF / 91. / MC / 98. / MC / 168. / BE / 178. / Ex / 187. / Ex / 207. / Es
37. / MC / 92. / MC / 99. / MC / 172. / Ex / 179. / Ex / 188. / Ex / 208. / Es
48. / MC / 93. / MC / 100. / MC / 173. / Ex / 180. / Ex / 191. / Ex
Study Objective 5
25. / TF / 103. / MC / 110. / MC / 141. / MC / 177. / Ex / 189. / Ex / 208. / Es
26. / TF / 104. / MC / 111. / MC / 148. / MC / 178. / Ex / 190. / Ex
27. / TF / 105. / MC / 112. / MC / 152. / MC / 179. / Ex / 191. / Ex
28. / TF / 106. / MC / 113. / MC / 155. / MC / 180. / Ex / 192. / Ex
50. / MC / 107. / MC / 114. / MC / 160. / MC / 181. / Ex / 193. / Ex
101. / MC / 108. / MC / 115. / MC / 175. / Ex / 182. / Ex / 204. / Ma
102. / MC / 109. / MC / 139. / MC / 176. / Ex / 183. / Ex / 207. / Es
Study Objective 6
29. / TF / 118. / MC / 124. / MC / 130. / MC / 166. / BE / 188. / Ex / 208. / Es
30. / TF / 19. / MC / 125. / MC / 131. / MC / 171. / BE / 193. / Ex
39. / MC / 120. / MC / 126. / MC / 144. / MC / 179. / Ex / 202. / C
40. / MC / 121. / MC / 127. / MC / 149. / MC / 180. / Ex / 203. / C
116. / MC / 122. / MC / 128. / MC / 156. / MC / 186. / Ex / 204. / Ma
117. / MC / 123. / MC / 129. / MC / 165. / BE / 187. / Ex / 207. / Es

Note:TF=True-False C = Completion Ex = Exercise

MC =Multiple Choice BE = Brief Exercise Ma = Matching Es = Essay

CHAPTER STUDY OBJECTIVES

1.Explain the characteristics and purposes of cost accounting. Cost accounting involves the procedures for measuring, recording, and reporting product costs. From the data accumulated, the total cost and the unit cost of each product is determined. The two basic types of cost accounting systems are job order cost and process cost.

2.Describe the flow of costs in a job order cost accounting system. In job order cost accounting, manufacturing costs are first accumulated in three accounts: Raw Materials Inventory, Factory Labor, and Manufacturing Overhead. The accumulated costs are then assigned to Work in Process Inventory and eventually to Finished Goods Inventory and Cost of Goods Sold.

3.Explain the nature and importance of a job cost sheet. A job cost sheet is a form used to record the costs chargeable to a specific job and to determine the total and unit cost of the completed job. Job cost sheets constitute the subsidiary ledger for the Work in Process Inventory control account.

4.Indicate how the predetermined overhead rate is determined and used. The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating capacity expressed in terms of a common activity base, such as direct labor cost. The rate is used in assigning overhead costs to work in process and to specific jobs.

5.Prepare entries for jobs completed and sold. When jobs are completed, the cost is debited to Finished Goods Inventory and credited to Work in Process Inventory. When a job is sold, the entries are: (a) Debit Cash or Accounts Receivable and credit Sales for the selling price and (b) Debit Cost of Goods Sold and credit Finished Goods Inventory for the cost of the goods.

6.Distinguish between under- and overapplied manufacturing overhead. Underapplied manufacturing overhead means that the overhead assigned to work in process is less than the overhead incurred. Conversely, overapplied overhead means that the overhead assigned to work in process is greater than the overhead incurred.

TRUE-FALSE STATEMENTS

1.Cost accounting is primarily concerned with allocating overhead.

2.A job order cost system is most appropriate when products that are produced have their own distinguishing characteristics.

3.A job cost accounting system is appropriate for homogeneous products that are continuously mass produced.

4.The perpetual inventory method is used in a cost accounting system.

5.A job order cost system and a process cost system are two alternative cost accounting systems.

6.A job order cost system identifies costs with a particular activity within the production process, such as mixing, or cutting.

7.Companies generally use a variation of either a job order cost system or a process cost system.

8.Raw Materials Inventory, Work in Process, and Finished Goods are all inventory accounts used in the general ledger when a job order cost accounting system is used.

9.Costs of jobs are recorded in the period in which the costs are paid.

10.The acquisition of raw materials causes the work in process account to increase.

11.Manufacturing costs are generally recorded and incurred in the same accounting period.

12.The Raw Materials account is used to recognize all raw materials purchases, purchases returns and allowances, and freight costs related to materials.

13.The stores ledger cards represent the subsidiary ledger for the Finished Goods Inventory control account in the general ledger.

14.When raw materials are purchased, the Raw Materials Inventory account is credited.

15.Factory labor is accumulated using time clocks and time cards.

16.Fringe benefits and payroll taxes associated with factory workers should be accumulated as a part of manufacturing overhead.

17.The Work in Process Inventory account is a subsidiary of the job order cost sheets control account.

18.In a job order cost system, each entry to the Raw Material Inventory account should be accompanied by a posting to one or more job cost sheets.

19.When direct materials are requisitioned from the storeroom, the cost of the materials should be removed from the Work in Process Inventory account and added to the job cost sheets for the individual jobs on which the material was used.

20.As manufacturing overhead is incurred, it is added to the individual job.

21.There should be a Work in Process ledger account for each job.

22.Actual manufacturing overhead costs are recorded in the respective manufacturing overhead expense account as incurred.

23.To calculate a predetermined overhead rate, you must multiply the actual activity level by the estimated annual overhead costs.

24.Actual manufacturing overhead costs should be added as a cost to the specific jobs as the costs are incurred.

25.A company using a computerized accounting system gets job cost information more quickly than provided through a manual system.

26.When a job is completed, its cost is removed from the Work in Process Inventory account and added to Cost of Goods Sold.

27.When goods are completed, the Finished Goods account is debited and the Work in Process Inventory account is credited.

28.Total manufacturing costs for a period consists of the costs of direct material used, the cost of direct labor incurred, and the actual manufacturing overhead incurred during the period.

29.Overapplied overhead means that actual manufacturing overhead costs were less than the manufacturing overhead costs allocated to jobs.

30.If monthly financial statements are prepared, overapplied overhead is shown as an operating expense on the income statement.

31.The transfer of direct materials to the production area causes an increase in work in process.

32On the financial statements at year end, all product costs could be found in raw materials, work in process, finished goods, and cost of goods sold.

33. Job cost sheets are often used as a subsidiary ledger for job costs.

34.If overapplied overhead is considered material, it is subtracted from Work in Process upon disposal.

35. Materials requisition slips indicate the receipt of materials from a supplier.

36. A predetermined overhead rate is used to allocate the actual costs of manufacturing overhead for the period.

Answers to True-False Statements
Item / Ans. / Item / Ans. / Item / Ans. / Item / Ans. / Item / Ans. / Item / Ans.
1. / F / 7. / T / 13. / T / 19. / F / 25. / T / 31. / T
2. / T / 8. / T / 14. / F / 20. / F / 26. / F / 32. / T
3. / F / 9. / F / 15. / T / 21. / F / 27. / T / 33. / T
4. / T / 10. / F / 16. / F / 22. / T / 28. / F / 34. / F
5. / T / 11. / F / 17. / F / 23. / F / 29. / T / 35. / F
6. / F / 12. / T / 18. / F / 24. / F / 30. / F / 36. / F

MULTIPLE CHOICE QUESTIONS

37.Luca Company overapplied manufacturing overhead during 2006. Which one of the following is part of the year end entry to dispose of the overapplied amount assuming the amount is material?

a. An increase to Finished Goods

b. A decrease to Applied Overhead

c. A decrease to Work in Process Inventory

d. An increase to Cost of Goods Sold

38. What is the best way to handle manufacturing overhead costs in order to get the most timely job cost information?

a.The company should account for only the direct production costs.

b.The company should apply overhead using an estimated rate throughout the year.

c.The company should add actual manufacturing overhead costs to jobs as soon as the overhead costs are incurred.

d.The company should determine an allocation rate as soon as the actual costs are known, and then apply manufacturing overhead to jobs.

39. At the end of the year, Manufacturing Overhead has been overapplied. What occurred to create this situation?

a.The company incurred more total job costs than the amount budgeted for the job.

b.The actual manufacturing overhead costs were less than the manufacturing overhead assigned to jobs.

c.The company incurred more manufacturing overhead costs than the manufacturing overhead assigned to jobs.

d.Estimated manufacturing overhead was less than actual manufacturing overhead costs.

40. Why is factory overhead ‘applied’ to products and jobs by manufacturing companies?

a.Total actual overhead costs can never be accurately determined for production.

b.Because indirect costs are easy to trace to products and jobs.

c.It allows managers more timely determination of product costs during the manufacturing process.

d.It provides a more accurate cost of the job or products being processed.

41. When a job is completed, what happens to the cost of the job?

a. It is removed from work in process and included in cost of goods sold.

b. It is removed from finished goods and included in cost of goods sold.

c. It is removed from materials inventory and included in work in process.

d. It is removed from work in process and included in finished goods.

42.What does cost accounting measure, record, and report?

  1. Product costs
  2. Future costs
  3. Manufacturing processes
  4. Managerial accounting decisions

43.If a manufacturing company acquires raw materials, to what account is the cost of raw materials purchased debited?

  1. Raw Materials Purchases
  2. Raw Materials Inventory
  3. Purchases
  4. Work in Process

44.At the point that manufacturing labor costs are incurred, to what account are they debited?

  1. Work in Process
  2. Factory Wages Expense
  3. Factory Labor
  4. Factory Wages Payable

45.Which one of the following contains sources of costs that will be added to job cost sheets?

  1. Invoices, time tickets, and the predetermined overhead rate
  2. Materials requisition slips, time tickets, and the actual overhead costs
  3. Materials requisition slips, payroll register, and the predetermined overhead rate
  4. Materials requisition slips, time tickets, and the predetermined overhead rate

46.Which one of the following is never part of recording the issuance of raw materials in a job order cost system?

  1. Debit Work in Process Inventory
  2. Debit Finished Goods Inventory
  3. Debit Manufacturing Overhead
  4. Credit Raw Materials Inventory

47.What transaction is recorded when direct labor is assigned to jobs?

  1. A debit to Work in Process Inventory and a credit to Factory Labor
  2. A debit to Manufacturing Overhead and a credit to Factory Labor
  3. A debit to Factory Labor and a credit to Manufacturing Overhead
  4. A debit to Factory Labor and a credit to Work in Process Inventory

48.When computing the predetermined manufacturing overhead rate, which amount below is most likely used on the numerator?

  1. Direct labor hours
  2. Estimated manufacturing overhead costs
  3. Actual manufacturing overhead costs
  4. Applied manufacturing overhead costs

49.Markley Manufacturing calculated its predetermined overhead rate to be 120% of direct labor cost. During June, the company incurred $90,000 of factory labor costs, of which $85,000 is direct labor and $5,000 is indirect labor. Actual overhead incurred was $84,000. How much will Markley debit to Work in Process Inventory in June?

  1. $108,000
  2. $198,000
  3. $174,000
  4. $102,000

50.Halitosis Company completed job 45 at a cost of $8,900 and later sold it for $13,000 cash. Which one of the following is one effect of selling the job?

  1. Debit Finished Goods Inventory $13,000
  2. Credit Finished Goods Inventory $8,900
  3. Debit Finished Goods Inventory $8,900
  4. Debit Accounts Receivable $8,900

51.Where would you expect to find overhead applied in the monthly financial statements? a. An operating expense

b.Assigned to a product account

c.A deduction of raw materials inventory

d.A liability

52.Which one of the following is a major purpose of cost accounting?

a.To provide gross profit rates to managers

b.To allocate overhead costs to jobs

c.To classify all costs as direct or indirect

d.To measure, record, and report product costs

53.Which of the following represents the two basic types of cost accounting systems?

a.Job order and process cost systems

b.Job order and job accumulation systems

c.Job order and batch systems

d.Process cost and batch systems

54.Which one of the following would most likely use a process cost system?

a.The company that makes Frosted Flakes

b.A company that prints wedding invitations

c.A company which makes motion pictures

d.A body shop which does collision repairs

55.Which of the following would be accounted for using a job order cost system?

a.The pasteurization of milk

b.The production of town homes

c.The production of textbooks

d.The production of cans of spinach

56.For which one of the following is process costing used?

a.Production of products which are unique to each customer

b.Production of homes

c.Production of products which are similar in nature

d.Production of in-ground swimming pools for customers

57.Which one of the following correctly describes job costing?

a.Have distinguishing characteristics

b.A series of connected manufacturing processes is necessary

c.Homogeneous goods are being produced

d.Large batches are produced

58.Which one of the following is an important feature of a job order cost system?

a.Each must be completed before a new product order is accepted.

b.Each consists of features which distinguish it from the next.

c.Each job uses similar processes to produce.

d.Each job has characteristics similar to the next.

59.What is unique about the flow of costs in a job order cost system?

a.Each job is costed separately in a Work in Process subsidiary ledger.

b.It involves accumulating material, labor, and manufacturing overhead costs as they are incurred in order to determine the job cost.

c.Job costs cannot be measured until all overhead costs are determined.

d.There are no costs remaining in Work in Process at year end.

60.In a job order cost accounting system, the Work in Process account is

a.closed at year end.

b.a period cost.

c.an expense.

d.a control account.

61.What journal entry should be made when a job is completed and all costs have been accumulated on a job cost sheet?

a.A debit to Finished Goods Inventory, and a credit to Work in Process Inventory

b.A debit to Work in Process Inventory, and a credit to Direct Materials, Direct Labor, and Manufacturing Overhead

c.A debit to Finished Goods Inventory and a credit to Direct Materials, Direct Labor, and Manufacturing Overhead

d.A debit to Cost of Goods Sold Inventory, and a credit to Work in Process Inventory

62.What are the two major steps in the flow of costs for a job cost system?

a.Accumulating and assigning

b.Allocating and assigning

c.Acquiring and accumulating

d.Accumulating and allocating

63.Which one of the following describes one amount which impacts the Raw Materials Inventory account?

a.It is reduced for the freight costs related to acquiring materials.

b.It is debited for purchase returns and allowances.

c.It is increased for the invoice cost of purchasing materials.

d.It is increased for the amount of purchase discounts taken.

64.In what manner does a company most likely maintain its records of individual items of raw materials?

a.In the stores ledger cards

b.In the work in process inventory control account

c.In the raw materials inventory account in the general ledger

d.In each of the separate job cost records

65.At what point in time are costs of raw materials debited to Work in Process Inventory?

a.When the materials are put into production

b.When the bill for the materials is paid

c.When the materials are ordered

d.When the materials are received

66.What is another name for the stores ledger cards?

a.The job cost records

b.Purchase requisitions

c.The Work in Process control account

d.Raw Materials inventory records

67.A company completed all postings for its job costs for the year. Which of the following should have the same totals at year end?

a.The cost of materials purchased and the total of the Raw Materials Inventory control account

b.The total of the amount in the Work in Process subsidiary ledger and the Work in Process Inventory control account total

c.The total of the accounts in the Work in Process subsidiary ledger and the Raw Materials Inventory control account total

d.The cost of materials charged to Work in Process Inventory and the total of the accounts in the Work in Process subsidiary ledger

68.Factory labor costs

a.omit vacation pay.

b.are equal to the total amounts of the paychecks the employees receive.

c.are debited to work in process when incurred.

d.include benefits for employees.

69.Which one of the following describes factory labor?

a.It is debited to manufacturing overhead when incurred.

b.It is debited to jobs as they are completed.

c.It is an inventory account in a job cost system.

d.It is assigned to work in process or manufacturing overhead.

70.Marion Manufacturing has the following labor costs:

Factory—Gross wages$141,000

Factory—Net wages118,000

Employer Payroll Taxes Payable23,000

How much should Marion debit to Factory Labor to record these amounts?

a.$259,000

b.$164,000

c.$141,000

d.$282,000

71.Which statement is true with regard to factory labor costs?

a.It represents the net amount paid to factory workers for work on jobs.

b.It is added to the Factory Labor account and later assigned to work in process or manufacturing overhead.

c.These costs are accrued before incurred.

d.Amounts incurred during a particular year that have not been allocated to jobs are carried over to the next year.