When a Large Variance Is Investigated

question 84

Multiple Choice

When a large variance is investigated:

• A) Only unfavourable variances really matter
• B) The standard is certainly wrong and must be corrected
• C) An extraordinary event could have occurred
• D) Managers are not concerned with quality issues related to the variance

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Definitions:

Comprehensive Income

The change in equity of a business entity during a period from transactions and other events and circumstances from non-owner sources. It includes all non-owner changes in equity, not just those from net income.

Dividends Declared

A portion of a company's earnings that is decided by the board of directors to be distributed to shareholders.

Statement Of Comprehensive Income

A financial statement that displays all changes in equity during a period except those resulting from investments by and distributions to the company’s shareholders.

Other Comprehensive Income

Income that includes all changes in equity from non-owner sources, such as foreign exchange adjustments or unrealized gains/losses on certain investments, not included in net income.