Which of the Following Has the Highest Level of Authority

question 21

Multiple Choice

Which of the following has the highest level of authority for a government under GAAP?

• A) A FASB standard.
• B) A GASB Implementation Guide.
• C) AICPA Industry Audit and Accounting Guide for local governments cleared by the GASB.
• D) An article in the Journal of Accountancy.

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Definitions:

High-low Method

The high-low method is a straightforward way to estimate the variable and fixed components of a cost by using the highest and lowest activity levels and the corresponding total costs.

Machine Hour

A unit of measurement that represents an hour of operation of a machine or equipment.

Fixed Costs

Expenses that do not change in proportion to the level of production or sales, such as rent and salaries.

High-low Method

A technique used in accounting and finance to estimate fixed and variable costs based on the highest and lowest levels of activity.