Reversing Entries Are Optional

question 36

True/False

Reversing entries are optional.

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Definitions:

Materials Price Variance

The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.

Standard Quantity

The expected or established quantity of materials or labor expected to be used during a manufacturing process or production cycle.

Standard Price

Standard price is the pre-determined cost that a company expects to pay for goods, materials, or services, used in budgeting and cost control.

Actual Output

Actual output is the real quantity of goods or services produced by a company or economy, as opposed to planned or theoretical outputs.