In a Deferral Adjustment, the Expense or Revenue Is Recognized

question 138

True/False

In a deferral adjustment, the expense or revenue is recognized after the cash is paid or received.

---

Definitions:

Forming Department

A section within a manufacturing facility where raw materials are shaped into components that will be assembled into final products.

Machine-Hours

A metric that gauges the amount of production or activity by tracking the duration machines run during the manufacturing operation.

Departmental Predetermined Rates

Rate estimates used to allocate indirect costs to products or services based on activities in specific departments, facilitating more accurate cost control and pricing strategies.

Manufacturing Overhead

Indirect costs related to manufacturing that cannot be directly tied to the production of specific goods, such as utility costs or salaries for production managers.