An Activity That Has a Direct Cause-Effect Relationship with the Resources

question 95

Multiple Choice

An activity that has a direct cause-effect relationship with the resources consumed is a(n)

• A) cost driver.
• B) overhead rate.
• C) cost pool.
• D) product activity.

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Definitions:

Income Statement

An income statement is a financial document that reports a company's financial performance over a specific accounting period, detailing income, expenses, and profit or loss.

Debit Column

A column in financial ledgers where debits are recorded, typically indicating increases in assets or expenses or decreases in liabilities, equity, and income.

Credit Column

Refers to the right side of a ledger account where entries serve to increase liabilities, revenues, or equity and decrease assets or expenses.

Accounting Cycle

The collective process of recording and processing the accounting events of a company, from when the transaction occurs, to its inclusion in the financial statements.