"The Company Has Not Made an Allowance for Bad Debts

question 2

Multiple Choice

"The company has not made an allowance for bad debts for an account deemed uncollectible in the amount of $250,000 as of the year ended December 31,2013." is an example of a ________.

• A)GAAP change requiring a qualified opinion
• B)scope limitation
• C)departure from GAAP
• D)report with a disclaimer of opinion

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Definitions:

Labor Rate Variance

The difference between the actual labor costs incurred and the standard labor costs expected for the work performed.

Labor Efficiency Variance

A metric used to measure the difference between the actual labor hours worked and the standard labor hours allowed for the production achieved.

Labor Standards

Predetermined measures of the amount of labor time necessary for the completion of a task or project.

Variable Overhead

Costs that vary with the level of production or sales, such as utilities or commissions, but not directly tied to specific units.