Which One of the Following Describes an Activity Base

question 137

Multiple Choice

Which one of the following describes an activity base?

• A)A denominator used by management based on estimated useful lives of the company's plant assets
• B)A measure which is estimated by management based on prior year's operations
• C)A measure that has a correlation with assigning overhead
• D)A guess by management on a fair method of applying overhead

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Definitions:

IFRS

International Financial Reporting Standards, a set of global accounting guidelines for preparing financial statements.

GAAP

Stands for Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards for financial reporting in the United States.

If Converted Method

An accounting method used to calculate diluted earnings per share, assuming all convertible securities were converted to common stock.

Treasury Stock Method

A method used to compute the number of new shares that could potentially be created by unexercised in-the-money warrants and options, used in the calculation of diluted earnings per share.