Which of the Following Statements Is True

question 54

Multiple Choice

Which of the following statements is true?

• A) There is double entry recording in a subsidiary ledger.
• B) A business with three credit customers would need to set up an accounts receivable subsidiary ledger.
• C) With a manual accounting system, where there is a control account and a subsidiary ledger for debtors, transactions for debtors must be recorded twice.
• D) Every business needs to set up special journals for returns transactions.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or sales, such as materials and labor.

Total Cost

The sum of all costs incurred by a business in producing a good or service, including both fixed and variable costs.

Output

The total quantity of goods or services produced by a company or an economy.

Average Total Cost

The total cost of production divided by the number of units produced, representing the per-unit cost of production including both fixed and variable costs.