Dunellon Company's Actual Sales Results Exceeded the Planned Results for February.This

question 21

Multiple Choice

Dunellon Company's actual sales results exceeded the planned results for February.This amount exceeded the amount of an unfavourable difference reported for January sales.Which one of the following statements about the sales budget report for the two months ending February 28 is true?

• A)The sales report is not useful since it shows a favourable and unfavourable difference for the two months.
• B)The differences for the two months will offset each other so the differences should not be a concern.
• C)The difference for February can be ignored since it is favourable.
• D)The differences for both months should be investigated if the amounts are material.

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Definitions:

Deposits in Transit

Funds that have been received and recorded by a company but not yet credited by the bank, often seen in the reconciliation of bank statements.

Bank Statement Balance

The ending balance on a bank statement, representing the total amount of money in an account as recorded by the bank at the end of a given period.

Petty Cash Account

A small amount of cash kept on hand to pay for minor or incidental expenses.

Fund Replenishing

The process of adding money to a fund to restore its level after expenses have been incurred.