If They Are to Be Useful to Managers, Variances Should

question 31

Multiple Choice

If they are to be useful to managers, variances should be reported:

• A)simultaneously to all managers within a week after the end of the month.
• B)in dollar amounts as soon as all costs are known.
• C)in physical terms or dollar amounts as promptly as feasible.
• D)in physical terms and dollar amounts if the variance exceeds 10% of the budget.

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Definitions:

Securities

Assets signifying either an equity stake in a company listed on the stock market, a debt investment in a government entity or a business, or entitlement to ownership through an option.

Capital Structure

The mix of different forms of capital financing used by a company, including debt, equity, and other financial instruments.

Debt

Amount of money borrowed by one party from another, used by many corporations to grow beyond what they could from earnings alone.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation, representing assets minus liabilities.