Source Documents

question 57

Multiple Choice

Source documents

• A)Are a source of accounting information.
• B)Do not provide objective evidence about transactions.
• C)Can only be in electronic form.
• D)Are acceptable as a substitute for financial statements.
• E)Are only used for audit purposes.

---

Definitions:

Standard Cost System

An accounting system that assigns predetermined costs to products and services, which are then compared to actual costs for variance analysis.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are a significant portion of production costs.

Raw Materials Inventory

The stock of basic materials that are used in production but have not yet been processed.

Standard Costs

Predetermined or budgeted costs for materials, labor, and overhead, used as benchmarks to measure actual performance and manage costs.