To identify: The appropriate answer for the given statement
Answer to Problem 1QC
Option a. The false statement is relevant information is always financial in nature.
Explanation of Solution
Relevant Information
Relevant Information is the information which is useful for the managers to make decisions.
a.
Relevant information is always financial in nature.
Relevant information is not always financial in nature. It also considers nonfinancial aspects to take a decision. Thus, the given statement is false.
b.
Relevant information always regards the future.
This is one of the characteristics of the relevant information that it always considers future for taking the decisions. This is the true statement.
c.
Sunk costs are never relevant to a decision.
Sunk costs are the cost that is incurred in the past and cannot be changed in future. This means it doesn’t consider the future and hence is never relevant to a decision. Hence, the statement is true.
d.
Relevant information always differs among alternatives.
This is also one of the characteristics of relevant information that it is different for different alternative decisions. Therefore, the given statement is not false.
Want to see more full solutions like this?
Chapter 8 Solutions
Managerial Accounting (5th Edition)
- Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? A. avoidable costs B. unavoidable costs C. sunk costs D. differential costsarrow_forwardWhich statement is incorrect concerning the constraint on relevant and reliable information? * A. Information may be relevant but so unreliable in nature or representation that its recognition may be potentially misleading. B. The balance between benefit and cost is a pervasive constraint which means that the benefits derived from the information should exceed the cost of providing it. C. If there is undue delay in the reporting of information, it may lose its relevance and reliability. D. In achieving a balance between relevance and reliability, the overriding consideration is how best to satisfy the economic decision-making needs of users.arrow_forwardFuture costs that do not differ among the alternatives at hand are not relevant in the given decision-making situation. true or false? please answer immediatelyarrow_forward
- Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? Group of answer choices A. avoidable costs B. unavoidable costs C. sunk costs D. differential costsarrow_forwardOne cost that is irrelevant in decision making is a sunk cost Group of answer choices True Falsearrow_forwardAny cost that is avoidable is relevant for decision purposes. O A. True O B. Falsearrow_forward
- Which of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.arrow_forwardThe definition of Materiality is: c. accuracy is always the most important consideration regardless of cost a. amount is large enough to have a significant impact on financial statements Od. IFRS is more authoritative than GAAP b. mistakes don't need to be corrected Silarrow_forwardEach of the following are true of relevant information except O different alternatives can be compared by examining đifferences in expected future revernues and expected ta cas O past costs are helpful when making predictions but not relevant when making decisions O significant past investment amounts are relevant to decision making O not all future revenues and expenses are relevantarrow_forward
- Which of the following statements about a sunk cost is false? Question 11Answer a. It is relevant to future decisions b. It will not be impacted by any future decisions c. It cannot be changed d. It is a cost that has already been paid forarrow_forward1. What factors determine the relevance of information to decision making? 2. What are sunk costs, and why are they not relevant in making decisions? 3. What information is relevant in an outsourcing decision?arrow_forwardIn a decision analysis situation, which one of the following costs is generally not relevant to the decision?A. Differential cost.B. Avoidable cost.C. Incremental cost.D. Historical cost.arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College