Final answer:
To update work-in-process accounts in cost accounting, the labor distribution summary is used, which allocates labor costs based on how employee time is distributed among tasks or departments the right answer is 2) .
Step-by-step explanation:
Cost accounting updates work-in-process accounts from the labor distribution summary. This summary is used to allocate labor costs to different jobs or departments within the company, based on the distribution of employee time. It essentially informs the cost accounting system how much of the labor costs should be assigned to the work-in-process for a particular job or process.
There are other documents like time cards, job tickets, and personnel action forms which play a role in the broader process of accounting for labor costs, but it is the labor distribution summary that directly affects the updating of work-in-process accounts. Time cards are used to record the actual time an employee works, which feeds into the preparation of the labor distribution summary. Job tickets can be used to track time spent on specific jobs, and personnel action forms may record changes in employee status or wage rates. However, when it comes to updating the work-in-process accounts specifically, the labor distribution summary is the document which quantifies and assigns the cost.
While the question does not directly relate to national accounts like Gross Domestic Product (GDP) & its components, Flow of Funds, and International Accounts, or economic indicators such as Production & Business Activity, Prices & Inflation (including the Consumer Price Index, the Producer Price Index, and the Employment Cost Index), understanding cost accounting principles is essential for analyzing business operations which, on a larger scale, impact these economic meas