Why Would a Government Be More Likely Than a Not-For-Profit

question 12

Multiple Choice

Why would a government be more likely than a not-for-profit organization to integrate its budget into its accounting system?

• A)Because the amount of expenditures are likely to be greater.
• B)Because the penalties for exceeding budgeted expenditures are more severe.
• C)Because governments have more sophisticated accounting systems than not-for-profit organizations.
• D)Governments are NOT more likely than not-for-profits to formally integrate their budget into their accounting system.

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Definitions:

Productive Capacity

The maximum output that a business can produce in a given period under normal conditions, considering its resources.

Overapplied Overhead

A situation where the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Variable Overhead Spending Variance

The difference between the actual variable overhead costs incurred and the expected costs based on standard costs.

Direct Labour Hour

The amount of time spent by workers directly manufacturing a product, which is used as a basis for allocating production costs in cost accounting.