Which of the Following Is Correct

question 13

Multiple Choice

Which of the following is correct?

• A) The manual ruling method can only be used to correct an error in the journal before posting.
• B) The correcting entry method can only be completed in two steps.
• C) The manual ruling method can be used to correct an error in the ledger after an entry has been posted.
• D) All of the answers listed are correct.

Distinguish between different overhead rate methods (plantwide rate, departmental rate).

Identify what constitutes a cost object in cost allocation.

Understand the principles of activity-based costing (ABC) and its application.

Grasp the basics of activity-based management (ABM) and its importance.

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Definitions:

Income Effect

The adjustment in demand for goods and services triggered by a change in consumers' discretionary income.

Income Increases

Situations where an individual's or household's earnings rise, potentially affecting their spending, saving, and investment behaviors.

Budget Constraints

The limitations on the consumption choices of individuals or organizations due to limited resources.

Substitution Effect

The economic principle that as prices rise or incomes decrease, consumers will replace more expensive items with less costly alternatives.