An Innocent Misrepresentation Occurs When an Agent Negligently Makes a Misrepresentation

question 5

True/False

An innocent misrepresentation occurs when an agent negligently makes a misrepresentation to a third party.

Identify the components and calculation of cost of goods sold.

Learn the classification of different accounts and their presentation on financial statements.

Understand the perpetual and periodic inventory systems and their implications.

Recognize the importance and method of adjusting entries for inventory and supplies.

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted and actual volume of units produced, multiplied by the standard fixed overhead rate.

Labour Efficiency Variance

The difference between the actual labor hours taken to produce a good and the standard hours expected, multiplied by the standard labor rate.

Actual Labour Hours

Actual Labour Hours refer to the total hours worked by employees, measured after the work has been completed, usually for comparison with planned or budgeted hours.