Which Statement Is True About the Activity Index Used in Preparing

question 98

Multiple Choice

Which statement is true about the activity index used in preparing the flexible budget?

• A)It applies only to fixed manufacturing costs.
• B)It is the same for all departments of the company.
• C)It significantly influences the variable costs that are being budgeted.
• D)It is irrelevant to total costs.

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Definitions:

Chart of Accounts

An organized list of all accounts used by an entity in its accounting system, facilitating the recording, reporting, and analysis of financial transactions.

Chart of Accounts

An organized list of all accounts in a business entity's financial records, each account accompanied by a reference number.

Account Numbers

Unique identifiers assigned to individual accounts within a company's accounting system, facilitating organization and tracking of financial transactions.

Ledger

A book or other collection of financial accounts of a particular type, often the final record where data from journals is compiled.