Basis of Accounting Determines Which of the Following

question 68

Multiple Choice

Basis of accounting determines which of the following?

• A) When transactions and events are recognized.
• B) What transactions and events will be reported.
• C) Where transactions and events will be reported.
• D) Why transactions and events will be reported.

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Definitions:

Direct Labor-Hours

A measure of the total hours worked by employees who are directly involved in the manufacturing process or production of goods.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated before the period begins by dividing estimated overhead costs by an estimated allocation base.

Machine-Hours

A measurement of the amount of time machines are operated in the production process, used as an allocation base for applying manufacturing overhead.

Direct Labor-Hours

A measure of the total hours worked directly on a specific product or service by employees.