Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Expenses

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Expenses

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Multiple Choice

Which of the following conditions would NOT normally indicate that standard costs for accrued expenses should be revised?

A temporary fluctuation in the cost of raw materials

A permanent change in wage rates

The introduction of new technology affecting efficiency

A significant change in the method of production

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Verified step by step guidance

Understand the concept of standard costs: Standard costs are predetermined costs used for budgeting and performance evaluation. They are typically revised when there are permanent changes in cost factors or production methods.

Analyze each condition provided in the problem: Determine whether each condition represents a temporary or permanent change that would justify revising standard costs.

Condition 1: 'A temporary fluctuation in the cost of raw materials' - Temporary fluctuations are short-term and do not typically warrant revising standard costs, as standard costs are meant to reflect long-term expectations.

Condition 2: 'A permanent change in wage rates' - Permanent changes in wage rates directly affect labor costs and would justify revising standard costs to reflect the new reality.

Condition 3 and 4: 'The introduction of new technology affecting efficiency' and 'A significant change in the method of production' - Both conditions represent permanent changes in production processes or efficiency, which would necessitate revising standard costs to align with the new operational standards.