Journal Entries Are Prepared

question 99

Multiple Choice

Journal entries are prepared

• A) only at the end of the month.
• B) only when cash is received or disbursed.
• C) whenever there is a business transaction which will generate an entry.
• D) only when financial statements are prepared.

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing beyond direct materials and direct labor, such as utilities, maintenance, and depreciation.

Prime Costs

The direct costs of manufacturing an item, which typically include direct labor and direct materials.

Factory Overhead Costs

Costs incurred from running a manufacturing plant that cannot be directly associated with any particular product, such as utilities, depreciation, and maintenance expenses.

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are a significant portion of the production cost.