Which of the Following Is Not True Regarding Enterprise Funds

question 100

Multiple Choice

Which of the following is not true regarding enterprise funds?

• A) Similar to commercial businesses, enterprise funds equity accounts include both contributed capital and retained earnings.
• B) A Statement of Revenues, Expenses, and Changes in Fund Net Assets would be the primary operating statement for enterprise funds.
• C) Enterprise funds' Cash Flow Statements could have up to four categories.
• D) None of the above; all are true.

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Definitions:

Machine-Hours

A measurement of production time, representing hours a machine is operated within a given period.

Predetermined Overhead Rate

This rate is used to allocate manufacturing overhead costs to products or job orders based on a set formula, typically involving estimated costs and an allocation base like machine hours or labor hours.

Direct Labor-Hours

The total hours of work attributable directly to the production of goods, often used as a basis for assigning labor costs to units of product.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated by dividing estimated overhead costs by an allocation base like direct labor hours.