Which of the Following Statements Is True

question 119

Multiple Choice

Which of the following statements is true?

• A) The modified accrual basis is a distinct system of accounting that contains financial statement elements that appear nowhere else. Among these are expenditures and fund balances.
• B) The modified accrual accounting used in governmental accounting is essentially equivalent to the cash basis accounting used by businesses.
• C) Governmental funds record may not record liabilities or accrue expenditures when payable.
• D) Revenues are recorded the same under accrual and modified accrual accounting. The difference in the two methods applies only to expenses/expenditures.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, rent, and salaries for managers.

Predetermined Overhead Rates

An estimated rate used in cost accounting to allocate overhead costs to products or services based on a set formula.

Machine-Hours

A measurement of the amount of time a machine is operated, used in allocating costs or determining production levels.

Molding

The process of shaping a pliable raw material by using a rigid frame or model called a mold.