Which of the Following Statements Is NOT True

question 31

Multiple Choice

Which of the following statements is NOT true?

• A) If total assets decreased by $30 000 during the period and shareholders' equity decreased by $20 000, liabilities decreased by $10 000 for the period.
• B) If total assets decreased by $50 000 during the period and shareholders' equity decreased by $30 000, liabilities decreased by $80 000 for the period.
• C) If the total assets owned by a company were $80 000 and shareholders' equity totalled $35 000 for the period, liabilities are $45 000.
• D) If total assets increased by $45 000 for the period and liabilities decreased by $20 000, shareholders' equity increased by $65 000.

---

Definitions:

Variable Manufacturing Overhead

These are manufacturing costs that vary in total directly and proportionately with changes in the production volume, such as indirect materials and utilities.

Direct Labor-Hours

The cumulative working hours of employees directly engaged in manufacturing activities.

Fixed Manufacturing Overhead

Costs in manufacturing that do not change with the level of production, such as salaries of supervisors and rent.

Job-Order Costing System

An accounting method that assigns costs to specific jobs or batches of products, capturing the direct materials, direct labor, and manufacturing overhead for each.