The Accounting Convention That Requires the Activities of the Business

question 43

Multiple Choice

The accounting convention that requires the activities of the business to be kept separate from the activities of the owner is the:

• A)dual aspect convention.
• B)business entity convention.
• C)conservatism convention.
• D)accounting period convention.

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Definitions:

Supplies Cost

The cost associated with materials and items that are consumed or used in the process of producing goods or providing services.

Machine-Hours

A measure of production output or capacity based on the number of hours a machine operates.

Variable Overhead Rate Variance

represents the difference between the actual variable overhead incurred and the standard variable overhead allocated for the actual production achieved.

Manufacturing Overhead

The total of all the indirect costs involved in manufacturing a product, which can include expenses related to equipment maintenance, factory rent, and utilities.