Which of the Following Statements Is Incorrect

question 94

Multiple Choice

Which of the following statements is incorrect?

• A) Permanent accounts is another name for nominal accounts.
• B) Temporary accounts carry a zero balance at the beginning of each accounting period.
• C) The Income Summary account is a temporary account.
• D) Real accounts remain open as long as the asset, liability, or equity items recorded in the accounts continue in existence.
• E) The closing process applies only to temporary accounts.

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Definitions:

Direct Materials Budget

A financial plan that estimates the raw materials required for production and the costs associated with these materials for a specific period.

Production Budget

An estimate of the total cost of production, including direct material, labor, and overhead expenses, for a specific period.

Management's Plans

The strategic and operational plans developed by a company's management to achieve its goals and objectives.

Direct Labor Hours

The sum of working hours of employees directly participating in the production of goods or provision of services.