For the Basic Accounting Equation to Stay in Balance, Each

question 66

Multiple Choice

For the basic accounting equation to stay in balance, each transaction recorded must

• A) affect two or fewer accounts.
• B) affect two or more accounts.
• C) always affect exactly two accounts.
• D) affect the same number of asset and liability accounts.

---

Definitions:

Activity-Based Costing

A costing method that allocates overhead and indirect costs to specific activities, providing more accurate product costing.

Direct Labor Rate

The cost of the work done by those employees who directly manufacture the products, usually measured per hour.

Direct Materials Cost

The expense associated with acquiring raw materials that are directly utilized in the manufacture of goods.

Traditional Costing

Traditional costing is an accounting method that allocates manufacturing overhead based on volume-related measures, such as direct labor hours or machine hours.