According to SAS 78,an Effective Accounting System Performs All of the Following

question 46

Multiple Choice

According to SAS 78,an effective accounting system performs all of the following except

• A) identifies and records all valid financial transactions
• B) records financial transactions in the appropriate accounting period
• C) separates the duties of data entry and report generation
• D) records all financial transactions promptly

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Definitions:

Indirect Costs

Costs not directly tied to a specific product, project, or activity, such as utilities, rent, and administrative expenses that support the overall operation.

Factory Equipment Depreciation

This is the process of allocating the cost of factory equipment over its useful life, thereby reducing its value due to wear and tear, or obsolescence.

Direct Costs

Expenses that can be directly tied to the production of specific goods or services, such as raw materials and labor.

Indirect Costs

Expenses not directly related to the production of goods or services but necessary for operations, such as utilities or administration.