Zetom Company Receives a Bill from One of Its Suppliers

question 165

Multiple Choice

Zetom Company receives a bill from one of its suppliers for services received and will pay the supplier next month.How does the receipt of the bill from the supplier affect the accounting equation of Zetom?

• A)assets and equity decrease
• B)liabilities increase and equity decreases
• C)assets and liabilities increase
• D)liabilities and equity increase

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Definitions:

Labour Rate Variance

A financial metric that measures the difference between the actual cost of labor and its expected cost based on standard rates.

Performance Report

A detailed report comparing budgeted data to actual data.

Budgeted Costs

Estimated financial figures for revenues and expenses set during the budgeting process for a future period.

Labour Efficiency Variance

A measure used in cost accounting to determine the difference between the actual hours worked and the standard hours planned for a task, multiplied by the standard labor rate.