A Trial Balance

question 29

Multiple Choice

A trial balance

• A) will not balance if a correct journal entry is posted twice.
• B) proves that all transactions have been recorded.
• C) proves that transactions are recorded correctly.
• D) is the same under GAAP and IFRS.

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Definitions:

Variable Cost

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

CVP Income Statement

An income statement format used in cost-volume-profit analysis, showing sales, variable costs, and the contribution margin.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much contributes to covering fixed costs and profit generation.

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no profit or loss.