An Error Has Occurred in the Closing Entry Process If

question 69

Multiple Choice

An error has occurred in the closing entry process if

• A) revenue and expense accounts have zero balances.
• B) the retained earnings account is credited for the amount of net income.
• C) the dividends account is closed to the retained earnings account.
• D) the balance sheet accounts have zero balances.

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Definitions:

Direct Materials Inventory

Direct materials inventory refers to raw materials that are directly used in the production of goods. These materials are assets on the balance sheet until they are used in production.

Direct Labor

The labor costs directly tied to the production of goods or services, which can include wages of workers or employees directly involved in manufacturing.

Factory Overhead

The indirect costs associated with manufacturing, including utilities, maintenance, and salaries of non-direct labor employees, that cannot be directly traced to specific products.

Product Costing

The process of determining the total cost involved in producing a product, including direct materials, labor, and overhead costs.