A Performance Report

question 106

Multiple Choice

A performance report

• A) always uses static budgets.
• B) compares actual costs with budgeted costs.
• C) uses a static or a flexible budget.
• D) both compares actual costs with budgeted costs and always uses static budget.
• E) both always uses static budgets and usually uses flexible budgets.

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Definitions:

Allowance Account

An account used in accrual accounting to estimate future adjustments, such as doubtful accounts or returns, affecting the value of asset accounts.

Percentage of Sales

A financial ratio illustrating how a particular figure on the financial statements reflects a certain percentage of the total sales.

Percentage of Receivables

A method used to estimate the amount of bad debt expense by calculating a fixed percentage of accounts receivable to be uncollectible.

Uncollectible Accounts

Accounts receivable that a company has determined are unlikely to be collected and written off as an expense.