Which of the Following Statements Is Incorrect

question 65

Multiple Choice

Which of the following statements is incorrect?

• A) Working papers are invaluable tools of the accountant.
• B) The work sheet shows the effects of adjustments on the account balances.
• C) After the work sheet is completed, the work sheet information is used to prepare the financial statements.
• D) On the work sheet, the accountant sorts the adjusted amounts into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance.
• E) The work sheet is an optional step in the accounting cycle.

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Definitions:

Required Return

The expected gain or loss on an investment over a specified period, factoring in both the risk and the time value of money.

Absorption Costing

A method of costing that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed overhead – in the cost of a product.

New Product

An item or service that has been recently developed or introduced to the market.

Required Return

The minimum expected return an investor demands for an investment, considering its risk.