Management Can Override Controls by

question 2

Multiple Choice

Management can override controls by

• A)recording fictitious journal entries (particularly at year end)
• B)appropriately changing assumptions and methods used to estimate account balances
• C)omitting,advancing,or delaying recognition of events that occurred during the reporting period
• D)disclosing facts that could affect the amounts recorded in the financial statements
• E)engaging in complex transactions designed to represent the financial condition of the company
• F)both A and B
• G)both A and C
• H)both D and E

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct labor and direct materials. This includes expenses such as utilities and rent for the manufacturing facilities.

Direct Labor Costs

Expenses associated with employees who are directly involved in the production of goods or services.

Actual Hours

Refers to the real amount of time spent on a task or activity, as recorded or reported.

Variable Overhead Efficiency Variance

The difference between actual variable overhead based on the standard hours allowed for the actual output and the actual variable overhead incurred.