In General, Subsidiary Ledgers Are Not Needed in Perpetual Systems

question 48

True/False

In general, subsidiary ledgers are not needed in perpetual systems because the accounting system captures sufficient details to support analyses that decision makers need.

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Definitions:

Multiple Production

Involves producing multiple products or variants from the same base of raw materials or through similar production processes, aimed at diversification and efficient resource use.

Direct Labor Hours

The cumulative hours spent by workers directly engaged in manufacturing products or delivering services.

Activity-Based Cost

A costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption.

Indirect Labor

Labor costs associated with tasks that do not directly contribute to the production of goods or services, such as administrative and maintenance roles.