An Error of Original Entry Arises When

question 21

Multiple Choice

An error of original entry arises when:

• A) A transaction is completely missed out.
• B) A transaction is posted to the wrong type of account.
• C) Transactions are posted to the correct accounts, but the debit and credit entries are reversed.
• D) The correct accounts are debited and credited, but the wrong amount is recorded.

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Definitions:

Materials Handling

The moving, protection, storage, and control of materials and products throughout manufacturing, warehousing, and distribution.

Direct Labor-Hours

The total hours of labor work directly on manufacturing the goods or providing the services, used for allocating labor costs to products or services.

Prefab Barns

Pre-engineered buildings designed for agricultural or storage purposes, which come in kits for quick and easy assembly.

Traditional Costing

An accounting method that allocates overhead costs to products based on a predetermined rate, often using direct labor hours or machine hours as the base.