One Major Difference Between Deferral and Accrual Adjustments Is

question 52

Multiple Choice

One major difference between deferral and accrual adjustments is:

• A)deferral adjustments involve previously recorded transactions and accruals involve new transactions.
• B)deferral adjustments are made after taxes and accrual adjustments are made before taxes.
• C)deferral adjustments are made annually and accrual adjustments are made monthly.
• D)deferral adjustments are influenced by estimates of future events and accrual adjustments are not.

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted fixed overhead and the applied fixed overhead, which is attributed to the variance in the volume of production.

Standard Labor-Hours

A measurement used in accounting to represent the number of labor hours expected to produce one unit of output.

Manufacturing Overhead Applied

The allocation of manufacturing overhead to specific jobs or product units based upon the predetermined overhead rate.

Standard Machine-Hours

The estimated amount of machine time required to produce a single unit of production under normal operating conditions.