Which of the Following Are Examples of Judgments Made in the Accounting

question 2

Multiple Choice

Which of the following are examples of judgments made in the accounting reporting process?
I. Useful life of machinery
II. Allowance for doubtful accounts
III. Obsolescence of assets
IV. Interest payment on bonds

• A) I, II, III and IV
• B) I, II and III
• C) II and III
• D) I and III

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Definitions:

Dye Costs

The expenditures associated with dyes or coloring agents used in the manufacturing process of products.

Skeins

Lengths or coils of yarn or thread as they are sold or produced, often used in textiles and knitting.

Spending Variance

This is the difference between the actual amount spent on a budget item and its planned or budgeted amount.

Wages And Salaries

Compensation paid to employees for their work or services.