Expenses Should Be Matched Against Revenue

question 11

Multiple Choice

Expenses should be matched against revenue

• A)before the earnings process is complete.
• B)only after cash is collected from the customer.
• C)in the same period as the revenue that they helped generate.
• D)after payment has been made for any costs related to the revenue.

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Definitions:

Adjusting

The process of making modifications to certain accounts through adjusting entries to reflect the true financial status of a business at the end of an accounting period.

Work in Process Inventory

This refers to the materials, labor, and overhead costs for products that are in the production process but not yet completed.

Overapplied Overhead

A situation where the allocated manufacturing overhead cost is more than the actual overhead incurred.

Actual Overhead

The real costs incurred for overhead in a business, which can include utilities, rent, management salaries, and other indirect expenses.