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

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which statement is FALSE regarding manufacturing overhead?

Manufacturing overhead is a direct cost that can be traced to specific products.

Manufacturing overhead includes indirect materials and indirect labor.

Depreciation on factory equipment is considered part of manufacturing overhead.

Manufacturing overhead is applied to products using a predetermined overhead rate.

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Verified step by step guidance

Understand the concept of manufacturing overhead: Manufacturing overhead refers to all indirect costs associated with the production process that cannot be directly traced to specific products. These include costs like indirect materials, indirect labor, and factory-related expenses such as utilities and depreciation.

Review the characteristics of manufacturing overhead: It is not a direct cost, meaning it cannot be directly traced to specific products. Instead, it is allocated to products using a predetermined overhead rate based on a cost driver, such as machine hours or labor hours.

Analyze the false statement: The statement 'Manufacturing overhead is a direct cost that can be traced to specific products' contradicts the definition of manufacturing overhead, as it is inherently an indirect cost.

Compare the other statements: The other statements correctly describe manufacturing overhead, including the inclusion of indirect materials and labor, depreciation on factory equipment, and the use of a predetermined overhead rate for allocation.

Conclude the reasoning: The false statement is identified by understanding the nature of manufacturing overhead as an indirect cost, which cannot be directly traced to specific products.