A Manufacturing Process Requires Small Amounts of Glue

question 117

Multiple Choice

A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)

• A) period cost.
• B) indirect material.
• C) direct material.
• D) miscellaneous expense.

---

Definitions:

Accounting Equation

The fundamental equation of double-entry bookkeeping, stating that assets equal liabilities plus equity.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest in the company.

Liabilities

Economic responsibilities or liabilities a corporation must repay to creditors, involving the transfer of economic advantages over time.

Assets

Economic resources owned or controlled by a business, expected to bring future benefits, such as cash, inventory, and equipment.