As a General Rule, an Investigation of a Variance Should

question 21

Multiple Choice

As a general rule, an investigation of a variance should be undertaken only if the

• A)variance is isolated
• B)anticipated benefits are greater than the expected costs.
• C)variance is negative.
• D)variance is positive.

---

Definitions:

Quick Ratio

A financial metric that measures a company’s ability to meet its short-term obligations with its most liquid assets.

Marketable Securities

These are liquid financial instruments that can be quickly converted into cash at a reasonable price, such as stocks or bonds.

Current Ratio

It's a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year.

Quick Ratio

A financial metric that assesses a company's ability to meet its short-term obligations using its most liquid assets, excluding inventory.