The Transaction Cycles Approach Leads to Efficient Processing of Large

question 47

Multiple Choice

The transaction cycles approach leads to efficient processing of large number of transactions because

• A)transaction cycles are easier to computerize.
• B)a large number of transactions within a given cycle can be categorized into a relatively small number of distinct types.
• C)the transaction cycle approach represents the natural order of business.
• D)transaction cycles are easy to understand.

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Definitions:

Applied Overhead

This is the process of assigning estimated overhead costs to specific cost objects based on a predetermined rate or basis such as labor hours or machine hours.

Underapplied Overhead

A situation where the actual manufacturing overhead costs are higher than the overhead costs allocated to products.

Credit Side

The right side of an accounting ledger where increases in liabilities, revenues, and equity accounts are recorded.

Short Term Profitability

The ability of a company to generate profit over a brief period, often evaluated on a quarterly or annual basis.