Which of the Following Internal Control Activities Could Best Prevent

question 17

Multiple Choice

Which of the following internal control activities could best prevent direct labor from being charged to manufacturing overhead?

• A) Reconciliation of work in process inventory with cost records.
• B) Comparison of daily journal entries with the factory labor summary.
• C) Comparison of period costs budgets and time cards.
• D) Reconciliation of the unfinished job summary and production cost records.

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Definitions:

Paid-In Capital

The total amount of money shareholders have invested in the company through the purchase of its stock.

Par

The face value of a bond or other financial instrument, often used in reference to its original issue value.

Stated Value

A value that is assigned to a share of stock by the company's board of directors, not based on market value, but used for accounting and reporting purposes.

Excess of Par

The amount by which a security's sale or issue price exceeds its par value.