The Higher the Degree of Operating Leverage, the Greater Is

question 222

True/False

The higher the degree of operating leverage, the greater is the risk of forecasting error.

---

Definitions:

Multi-Column Purchases Journal

A specialized accounting journal that records the purchase transactions of a business in multiple columns for different types of purchases.

Accounts Payable Account

An accounting entry that represents a company's obligation to pay off a short-term debt to its creditors or suppliers.

Cash Account

An account that tracks the flow of cash transactions, including receipts and payments, impacting a business's overall cash balance.

Subsidiary Ledger

A detailed ledger that provides a breakdown of individual transactions affecting a specific general ledger account, facilitating in-depth analysis and reconciliation.