The Major Disadvantage of the Account Classification Method Is

question 57

Multiple Choice

The major disadvantage of the account classification method is

• A) While some cost items will exactly correspond to a fixed or variable cost, other cost items will not.
• B) The difficulty associated with implementing it.
• C) Small companies may have an expansive account list making the task hard.
• D) Incorrectly classifying costs could lead to minor errors in cost estimates.

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Definitions:

Special Cases

Situations or scenarios that deviate from the norm, requiring unique considerations or treatments in various contexts such as law, economics, or computing.

Share of Stock

A unit of ownership in a corporation that entitles the shareholder to a portion of the corporation's earnings and assets.

Share Value

The financial worth of a single share of a company's stock.

Dividend Policy

Dividend Policy is a company's strategy or guidelines used to decide how much of its earnings will be paid out to shareholders in the form of dividends.