If the Balance in a Forfeited Shares Account Is Refundable

question 5

Multiple Choice

If the balance in a forfeited shares account is refundable to the owners of those shares,then the forfeited shares account is classified as a component of:

• A)income
• B)liabilities
• C)equity
• D)expense.

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Definitions:

Overhead Cost Pool

A collection of indirect costs that are grouped together to aid in their allocation to cost objects.

Activity Measure

A metric used to quantify the level of activity, work, or output in a business process or operation.

Overhead Rate

A financial ratio that allocates overhead costs to products or services based on a predetermined measure, often used to calculate total production costs.

Cost Hierarchy

A system that categorizes costs based on their direct traceability to production activities, often utilized in activity-based costing.