Which of the Following Statement Is True Regarding the Recording

question 80

Multiple Choice

Which of the following statement is true regarding the recording process?

• A) Because IFRS rely more on fair value and less on historical cost than U.S. GAAP the double-entry accounting system is not widely used by companies who use IFRS.
• B) Both IFRS and U.S. GAAP, use the same general rules of debits and credits and the steps in the recording process.
• C) A trial balance using IFRS is organised by first showing the accounts from the statement of financial position followed by accounts from the income statement; a trial balance using U.S. GAAP is organized using the opposite order.
• D) All of the choices are correct regarding the recording process.

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Definitions:

Manufacturing Margin

The difference between the sales revenue of manufactured products and their production costs (excluding indirect costs).

Variable Costing

A costing method that includes only variable production costs (direct labor, direct materials, and variable manufacturing overhead) in product costs.

Absorption Costing

Accounting method that includes all manufacturing costs (direct costs, variable and fixed overhead) in the cost of a product.

Variable Costing

A method of costing that includes only variable production costs in product costs, treating fixed manufacturing overhead as a period cost to be charged against revenue in the period incurred.