Idle Production Capacity Can Be Reduced By

question 10

Multiple Choice

Idle production capacity can be reduced by:

• A)decreasing the number of work days per week, but increasing the hours per day.
• B)using a commission compensation system.
• C)allowing personnel to work overtime.
• D)hiring additional full-time personnel.

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Definitions:

Income Summary Account

A temporary account used in the closing process that aggregates all income and expense accounts to determine net income or loss for a period.

Permanent Account

An account in the general ledger that carries its ending balance over to the next accounting period, such as assets, liabilities, and equity accounts.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial condition at a specific time, summarizing its assets, liabilities, and shareholders' equity.

Income Statement Debit Column

Typically, an income statement does not use a debit column; instead, expenses decrease revenue to show net income or loss.