Figure 14-2 at the Beginning of the Year, Devonshire Company

question 148

Multiple Choice

Figure 14-2 At the beginning of the year, Devonshire Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
Refer to Figure 14-2. For the current year, appraisal costs are what percentage of sales?

• A) 3.333%
• B) 0.833%
• C) 0.500%
• D) 0.333%

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Definitions:

Expense Account

An income statement account that represents the cost of goods sold, operating expenses, and non-operating expenses.

Income Statement

A financial report that shows the revenues, expenses, and profit or loss of a company over a specific accounting period.

Debit Total

The sum of all debit entries made in an account or in the general ledger.

Credit Total

The sum of all credits entered into an accounting system during a specific period.