Spoken and Written Representations Given by the Auditee's Officers,directors,owners,and Employees

question 17

True/False

Spoken and written representations given by the auditee's officers,directors,owners,and employees are generally considered reliable enough to stand on their own.

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Definitions:

Overapplied Amount

This term refers to a situation where the allocated or applied costs in cost accounting exceed the actual costs incurred.

Factory Overhead Rate

A cost allocation rate used in manufacturing to assign estimated overhead costs to production activities or output, based on a predetermined formula.

Direct Labor Hours

The total hours worked directly on the production of goods.

Overapplied Overhead

Occurs when the allocated manufacturing overhead costs are more than the actual overhead costs incurred, leading to adjustments in cost accounting records.