Some Transactions Can Qualify as Either Business Entertainment or as a Business

question 15

Essay

Some transactions can qualify as either business entertainment or as a business gift.In such cases,the business entertainment classification usually predominates.However,in one situation a choice between the two is allowed.Explain.

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Definitions:

Materials Used

The quantity and cost of raw materials consumed in the production process, including both direct and indirect materials.

Manufacturing Overhead Account

An accounting term that aggregates all indirect costs associated with manufacturing a product.

Adjusting

The process of making modifications to certain accounts through adjusting entries to reflect the true financial status of a business at the end of an accounting period.

Work in Process Inventory

This refers to the materials, labor, and overhead costs for products that are in the production process but not yet completed.