A Negative Consequence of Recording Byproducts in the Accounting Records

question 94

Multiple Choice

A negative consequence of recording byproducts in the accounting records when the sale occurs is that ________.

• A) the revenue from the byproducts is usually fairly large and the accounting records will be distorted
• B) earnings cannot be timed under this method
• C) managers can be tempted to stockpile byproducts
• D) it involves complex calculations compared to the production method

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Definitions:

Runout Tolerances

Specifies the limits within which the variation of a surface's location and the feature's circularity must be contained as it rotates around a datum axis.

Datum Feature

A physical feature of a part that acts as a reference for measurement and geometry during machining or inspection processes.

RFS

Requirement for the feature size; a specification in geometric tolerancing where size is a factor.

Runout Tolerance

A type of geometric tolerance that controls the variation of a feature's surface as it rotates about a datum axis.