One of the components of factory overhead is............
Raw materials consumed
Manufacturing wages
Carriage inwards
Depreciation of plant and machinery
Correct answer is D
Costs that support production but are not direct materials or direct labor are considered overhead. It includes;
In a manufacturing account, royalties paid
Debited to the trading account
Credited to the profit and loss account
Credited to the manufacturing account
Debited to the manufacturing account
Correct answer is D
Royalty paid on the basis of output (manufacturing) is debited to the Trading or Manufacturing Account as it is considered a normal business expenditure.
A credit entry is made in the plant and machinery account for the ......................
Purchase of an additional plant and machinery
Sale of plant and machinery
Maintenance of plant and machinery
Appreciation of plant and machinery
Correct answer is B
No explanation has been provided for this answer.
A fall in the value of a fixed asset due to technological changes is described as?
Superfluity
Wear and tear
Obsolescence
Depletion
Correct answer is C
Obsolescence is a process by which a machine, or in this case, a fixed asset becomes outdated, no longer used or losses value as a result of changes in the level of technology
The amount set aside out of profits to strengthen the financial position of the business is
Position
Reserve
Depreciation
Surplus
Correct answer is B
A reserve is profits that have been appropriated for a particular purpose. Reserves are sometimes set up to purchase fixed assets, pay an expected legal settlement, pay bonuses, pay off debt, pay for repairs and maintenance, and so forth.