Which accounts normally have debit balances? Definition of Debit Balance In accounting, a debit balance refers to a general ledger account balance that is on the left side of the account. This is often illustrated by...
Which accounts normally have debit balances? Definition of Debit Balance In accounting, a debit balance refers to a general ledger account balance that is on the left side of the account. This is often illustrated by...
will be sorted by activities. True Right! False Wrong. 11. In activity-based costing, the manufacturing overhead cost per unit will depend partially on the number of units in a batch. True Right! For example, a setup...
Using the information generated in activity-based costing to plan and control activities and processes.
statement covers the period of time shown in its heading. 3. Amounts earned by a company in its main operating activities are known as __________. Revenues Right! This is the correct answer. Gains Wrong. Gains pertain...
during the current accounting period. Mark as wrong Mark as right gains This term describes positive income statement items resulting from actions outside of a company’s main operating activities. One of these occurs...
...thereby reducing working capital by $5,000. Either way, working capital will be reduced by the same amount. 19. Which of the following working capital accounts will not be included in the cash flows from operating...
for the year are less than the expenses and losses, the result is a net loss that reduces the normal credit balance in the Retained Earnings account.) The balance in the Retained Earnings account is also decreased when...
of debt in ratios such as debt to equity. total liabilities This balance sheet amount is used for the amount of debt in ratios such as debt to equity. Mark as wrong Mark as right net cash provided by operating...
Our Explanation of Nonmanufacturing Overhead provides examples of a manufacturer's expenses which are not considered to be costs of a product for financial reporting. However, they are operating expenses that will have...
What are consolidated statements of operations? Consolidated statements of operations is the heading appearing on the financial statement also referred to as the income statement. In a small survey of 14 U.S....
What are some examples of financing activities on the cash flow statement? Definition of Financing Activities Financing activities reported on the statement of cash flows (SCF) involve changes to the long-term...
Why is an amount in the cash flows from investing activities shown in parenthesis? An amount shown in parenthesis within the investing activities section of the cash flow statement indicates that cash was used to...
, the net amount is not likely to be the same as the current value. False Right! 18. Free cash flow is the cash provided by operating activities minus the cash used by financing activities. True Wrong. False Right! Free...
A technique for allocating costs to a product, service, customer, etc. The premise is that activities cause an organization to incur costs. Once the costs of the activities have been identified and each activity’s...
See units of production method of depreciation.
What is the units of activity depreciation? Definition of Units-of-Activity Depreciation The units-of-activity depreciation is unique among the common methods of depreciation in that the useful life of the asset being...
five types of activities or costs for each of the items 17 - 31: Unit-level activity or cost Batch-level activity or cost Product-level activity or cost Facility-level activity or cost Organization-level activity or...
An owner’s or stockholders’ equity account with a debit balance instead of the normal credit balance. Examples include the owner’s drawing account, a dividend account, and the treasury stock account.
To enter an amount on the right side of an account. Normal entries to revenue accounts are credits. Liabilities normally have credit balances. To learn more about debits and credits, see our Debits and Credits Outline.
Scrap or waste that should have been avoided. In other words, abnormal spoilage is the amount that is over and above the normal amount that is expected in a production process.
. If the range of these MHs (6,000 to 10,000) are not outside the range of normal activity, we know by definition that the fixed manufacturing costs will not change in this range as the MHs change. That means that any...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
factor such as the production machine hours. In reality there are many factors that are driving up the factory overhead costs. Here are a few examples of some of the activities (in addition to the production machine...
. Also remember that we debit asset accounts (other than contra asset accounts) in order to increase their normal debit balance. 2. Should the $500 entry to Mary Smith, Capital be a debit? Yes Wrong. The owner's...
, June 30, etc.) Statement of cash flows. This statement reports the major causes for the change in cash and cash equivalents during the accounting period. The cash flows are presented as operating, investing, or...
used in a company’s peripheral activities will reduce the company’s non-operating (or other) income. Examples of Depreciation Expense Reported as an Administrative Expense The depreciation of the following assets...
and operating budgets. When standard costs are used in a manufacturing setting, a product’s standard cost for a future accounting period will consist of the following: Direct materials: a standard quantity of each...
divided by the interest expense of $150,000). Since the interest coverage ratio is based on the net income under the accrual method of accounting, we recommend that you also review the corporation’s cash provided by...
amount, since reducing inventory has a positive effect on the company’s cash balance.) Additional Information The change in the inventory is reported as an adjustment to the company’s net income in the cash from...
Expense and credit a liability account in the accounting period when the sales occur. When the commission payment is made, the liability account is debited and the Cash account is credited. If the sales are related to...
the depreciation expense had reduced net income but cash was not reduced. In other words, the positive $8,000 of depreciation expense is not a source of cash, it is merely a needed adjustment to convert the accrual net...
of $20,000 a year for 10 years. The current year’s income statement is reporting depreciation expense of $20,000 but there is no cash payment in the current year for this expense. This is why depreciation expense is...
are the costs of missed opportunities reported on the income statement? Select... As an operating expense As a nonoperating loss Not reported on the income statement 19. Are U.S. corporation’s required to have their...
period. The cash flows are listed under one of the following categories: operating activities, investing activities, and financing activities. The total of the three categories should equal the change in the amount of...
Waste, scrap, evaporation, etc. in the manufacturing of products. Normal spoilage is considered unavoidable and is part of the cost of producing the good output. Abnormal spoilage is considered avoidable and is not part...
A method of costing manufactured items that differs from normal costing and standard costing. Under actual costing each accounting period’s actual manufacturing overhead costs and each accounting period’s...
such as the sale of goods and fees earned from providing services Nonoperating revenues (or other income), earned peripheral activities. An example is interest income that is earned by a retailer when it invests its...
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