ROE Is Defined as Net Income Divided by Total Assets

question 42

True/False

ROE is defined as net income divided by total assets.

Differentiate between accrual basis and cash basis accounting.

Identify the procedures to correct accounting errors.

Distinguish between correcting entries and adjusting entries.

Understand the methods of correcting errors on saved documents in QBO.

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Definitions:

Fixed Manufacturing Overhead

Costs related to manufacturing that do not vary with the level of production, such as rent, salaries, and utility costs for the factory.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) as part of the cost base of a product.

Variable Costing

An accounting method that includes only variable production costs in product costs and treats fixed overheads as period costs.

Fixed Manufacturing Overhead

The sum of all regular, non-variable costs involved in manufacturing, including rent, salaries of permanent staff, and maintenance of equipment.