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True or False Question:
- Costs such as administrative salary expense and interest expense are more difficult to directly associate with the revenue they help to earn.
Explain the reason for the answer.
Step by step
Solved in 3 steps
- In your own words explain the meaning of:a. differential revenue, b. differential cost, and c. differential income.Explain the meaning of (A) differential revenue, (B) differential cost, and (C) differential profit (loss).Which of the following statements is false? Multiple Choice In general, the term expense is used for managerial purposes, while the term cost refers to external financial reports. An opportunity cost is the benefit forgone by selecting one alternative over another. An outlay cost is a past, present, or future cash outflow. A cost is a sacrifice of resources.
- How the system of cost accounting has overcome the limitations of financialaccounting. Explain it by pointing out the different limitations of financialAccounting.Companies that use OSD can deduct the cost of sales or the cost of services. Is it true or false?Explain two reasons why uncontrollable costs are included in the income statement
- Which of the following statements is/are FALSE: I. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows. V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset’s useful life and increase the asset’s capacity is…Which of the following statements is/are FALSE: I. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows. V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset's useful life and increase the asset's capacity is capitalised.…Cost is a pervasive constraint on the information that can be provided by financial reporting. Reporting financial information imposes costs, and it is important that those costs are justified by the benefits of reporting that information. b. Describe any THREE (3) costs each incurred by the providers and users of the information.
- True or false A cost center manager does not have the ability to produce revenue.What is the rationale behind treating period costs as current expenses? a. Period costs are uncontrollable b. Period costs are immaterial c. Allocation of period costs is arbitrary at best and could lead to erroneous decisions d. Period costs will occur whether or not production occurs and so it is improper to allocate these costs to production and defer a current cost of doing businessWhy do proponents of LIFO argue that it provides a better match of revenue and expenses? Is there any situation that it would it not provide a better match?