An Adjusting Entry Is Not Required for

question 27

Multiple Choice

An adjusting entry is not required for

• A) outstanding checks.
• B) collection of a note by the bank.
• C) NSF checks.
• D) bank service charges.

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Definitions:

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, multiplied by the actual quantity of materials purchased.

Labor Rate Variance

The difference between the expected cost of labor per unit of production and the actual cost, often used to identify efficiency and wage rate changes.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual production volume, resulting from efficiency in variable overhead resource usage.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost of variable overhead allocated for the actual production level.