An Unacceptable Way to Make a Correcting Entry Is to

question 193

Multiple Choice

An unacceptable way to make a correcting entry is to

• A) reverse the incorrect entry.
• B) erase the incorrect entry.
• C) compare the incorrect entry with the correct entry and make a correcting entry to correct the accounts.
• D) correct it immediately upon discovery.

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Definitions:

Direct Labor Time Variance

The difference between the estimated time to produce a good or service and the actual time taken, multiplied by the hourly labor rate.

Direct Labor

This references the cost of labor that can be directly attributed to the manufacture or production of specific goods or services.

Cost Variance

The difference between the expected (budgeted) cost of an activity and the actual cost incurred, used in budgeting and financial reporting to monitor performance.

Standard Cost

A predetermined cost of manufacturing, projecting what each product should cost under normal conditions.