1) The debit to factory overhead for the cost of indirect materials is obtained from the
summary of the materials requisitions.
2) The negotiated price approach allows the managers of decentralized units to agree
among themselves as to the transfer price.
3) A process cost accounting system provides for a separate record of the cost of each
particular quantity of product that passes through the factory.
4) When the allowance method for accounting for uncollectible receivables is used, net
income is reduced when a specific receivable is written off.
5) In order to maintain the original value of a trading security, the fair value
adjustments are debited or credited to the account Valuation Allowance for Trading
Investments.
6) The balance in Retained Earnings should be interpreted as representing surplus cash
left over for dividends.
7) If the standard to produce a given amount of product is 600 direct labor hours at $15
and the actual was 500 hours at $17, the time variance was $1,700 unfavorable.
8) Cash flows from financing activities, as part of the statement of cash flows, include
payments for dividends.
9) The most effective means of presenting standard factory overhead cost variance data
is through a factory overhead cost variance report.
10) A voucher is a form on which is recorded pertinent data about a liability and the
particulars of its payment.
11) A responsibility center in which the authority over and responsibility for costs and
revenues is vested in the department manager is termed a profit center.
12) Adjustments for accruals are needed to record a revenue that has been earned or an
expense that has been incurred but not recorded.
13) Purchases of merchandise are typically credited to the merchandise inventory
account under the perpetual inventory system.
14) Factory overhead is an example of a product cost.
15) On the income statement in the single-step form, the total of all expenses is
deducted from the total of all revenues.
16) Indirect labor would be included in factory overhead.