An Account Used to Record the Owner's Investments in a Business

question 75

Multiple Choice

An account used to record the owner's investments in a business is called a(n) :

• A) Capital account.
• B) Expense account.
• C) Liability account.
• D) Withdrawals account.
• E) Revenue account.

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Definitions:

Manufacturing Overhead

All the costs associated with manufacturing a product that cannot be directly attributed to a specific unit of production, such as factory rent, utilities, and maintenance.

Machine-Hours

A measure of the number of hours a machine is operated in a given period.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, based on a cost driver, calculated before the period begins.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, rent, and salaries for managers.