Which of the Following Is Not a Method Used to Understate

question 8

Multiple Choice

Which of the following is not a method used to understate liabilities?

• A) understate accounts payable
• B) understate accrued liabilities
• C) recognize earned revenue as unearned revenue
• D) under record future obligations

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Definitions:

Direct Labor-Hours

Cumulative working hours of employees specifically involved in the production process.

Variable Overhead

Costs that vary with the level of production or business activity, such as utilities or raw materials.

Materials Price Variance

The variance between the real expenses incurred from direct materials in manufacturing and the anticipated standard cost of those materials.

Labor Rate Variance

The discrepancy between what labor actually costs and what was originally forecasted or considered standard.