Although Formal Entry of Standard Costs and Variances into the Accounting

question 28

True/False

Although formal entry of standard costs and variances into the accounting records is not required,some organizations make such entries in order to emphasize the importance of variances as well as to simplify the bookkeeping process.

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how effectively a company collects cash from its credit sales by comparing net credit sales with the average accounts receivable.

Average Collection Period

The average amount of time it takes for a business to receive payments owed by its customers for goods or services sold on credit.

Net Sales

The total revenue from sales of goods or services, less returns, allowances for damaged or missing goods, and discounts.

Annual Interest Rate

The percentage rate charged on a loan or paid on an investment over a one-year period.