Manufacturing entities using standard costing systems should avoid the use of accounting estimates in order to reduce the likelihood of audit adjustments.

Question

Quizplus · Accepted Answer

This statement is false. Accounting estimates are often necessary in standard costing systems and are recognized by GAAP (Generally Accepted Accounting Principles). However, manufacturing entities using standard costing systems should ensure that the estimates are reasonable and well-supported, and that they follow consistent and appropriate accounting methods. If accounting estimates are not correctly made, audit adjustments may be necessary.

Manufacturing Entities Using Standard Costing Systems Should Avoid the Use