The Extent of Internal Control Features Adopted by a Company

question 36

True/False

The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit.

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Definitions:

Revenue Variance

The difference between the actual revenue earned and the budgeted or expected revenue.

Static Planning Budget

A budget based on a single level of output, not adjusted for changes in activity levels.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for better budget-to-actual comparisons.

Favorable Spending Variance

A situation in which actual spending is less than the budgeted or projected amount, indicating cost efficiency.