If Total Liabilities Increased by $6,000, Then

question 175

Multiple Choice

If total liabilities increased by $6,000, then

• A) assets must have decreased by $6,000.
• B) equity must have increased by $6,000.
• C) assets must have increased by $6,000, or equity must have decreased by $6,000.
• D) assets and equity each increased by $3,000.

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Definitions:

Actual Manufacturing Overhead Costs

The real costs incurred from indirect manufacturing expenses such as utilities, rent, and salaries not directly tied to production.

Specific Job

A particular task or project within a business that requires specific skills or expertise, often related to job costing in accounting.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated by dividing estimated overhead costs by an allocation base, such as direct labor hours.

Estimated Annual Overhead Costs

An approximation of the indirect costs that a business expects to incur over a year in its operations.