Consistency Aids Comparability When a Company Uses the Same Accounting

question 119

True/False

Consistency aids comparability when a company uses the same accounting principles and methods from year to year or when companies with similar circumstances use the same accounting principles.

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Definitions:

Direct Materials Used

The cost of raw materials that are directly involved in the production of goods.

Raw Materials

The basic materials and components required at the start of the production process to manufacture goods.

Total Manufacturing Costs

The sum of all costs directly associated with the production of goods, including raw materials, direct labor, and manufacturing overhead.

Incurred

Refers to costs or expenses that have been realized or experienced by a business or individual.