Overrings Should Not Be Corrected by Undercharging on Other Items

question 210

Multiple Choice

Overrings should not be corrected by undercharging on other items because this:

• A) Upsets the customer
• B) Confuses inventory controls
• C) Eliminates interaction by a manager or supervisor
• D) Is probably the easiest method of theft by employees
• E) All of the above
• F) None of the above

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Definitions:

Permanent/Temporary

Pertaining to accounts in accounting where permanent accounts are balance sheet accounts that carry over balances into the next financial period, and temporary accounts are reset or closed to equity through retained earnings at the end of a period.

Normal Balance

The side of an account (debit or credit) where increases in the account are recorded, reflecting the nature of the account.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically including income statement, balance sheet, and cash flow statement.

Permanent/Temporary

Terms used to differentiate between accounts that remain open over fiscal periods (permanent) and those closed at the end of a period (temporary).