Specialty foods, inc. maintains a separate accounts receivable account for each customer. regarding this accounting treatment, which of the following statements is incorrect? a. the separate customer accounts receivable are called subsidiary accounts. b. the purpose of this accounting treatment is to account for payments received from the customer and the amounts still owed. c. the sum of all balances in the subsidiary accounts receivable equals a control account balance. d. when a customer makes a payment on account, a debit is posted to the accounts receivable subsidiary account as well as to the accounts receivable control account.

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?