The Primary Factor That Distinguishes Error from Fraud Is

question 4

Multiple Choice

The primary factor that distinguishes error from fraud is:

• A)whether the underlying cause of misstatement relates to the misapplication of accounting principles or to clerical processing.
• B)whether the misstatement is perpetrated by an employee or by a member of management.
• C)whether the underlying cause of a misstatement is intentional or unintentional.
• D)whether the misstatement is concealed.

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Definitions:

Direct Labor-Hours

The total hours worked directly on manufacturing goods or providing services.

Manufacturing Overhead

Indirect costs related to manufacturing that do not include direct materials or direct labor.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate overhead costs to products or services.

Machine-Hours

A measure of production output or operational time, calculated by the number of hours machines are running.