Accounting Is an Information and Measurement System That

question 110

Multiple Choice

Accounting is an information and measurement system that

• A) identifies economic activities
• B) records economic activities
• C) communicates economic information
• D) identifies and records economic activities
• E) All of these

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Definitions:

Variable Costing

An accounting method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold.

Absorption Costing

A system of accounting that encompasses the full range of manufacturing costs—direct materials, direct labor, and overheads both variable and fixed, within the cost framework of a product.

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in a net profit of zero.

Eastern Division

A geographical or operational segment of a larger organization designated to cover the eastern part of a country or area.