Which of the Following Statements About Updating an Open Customer

question 31

Multiple Choice

Which of the following statements about updating an open customer invoice file is correct?

• A) Only cash sales are added.
• B) Only credit sales are added.
• C) Both cash and credit sales are added, but the cash sales are eliminated at the end of the accounting period.
• D) Both cash and credit sales are added, because the file provides a source of sales history.

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Definitions:

Variances

The difference between planned or expected financial outcomes and the actual results achieved, often analyzed in budgeting and cost control.

Direct Labor-Hours

The number of hours spent by workers producing a company's goods, a measure of direct labor input.

Standard Cost System

An accounting method where costs are predetermined for product costing, facilitating variance analysis between expected and actual costs.

Fixed Manufacturing Overhead

Indirect costs associated with manufacturing that do not vary with the level of production, such as salaries of managers and depreciation of factory equipment.