In an ABC System, a Cost Driver Must Be Chosen

question 50

Multiple Choice

In an ABC system, a cost driver must be chosen for each:

• A) Activity
• B) Cost pool
• C) Cost object
• D) Unit-level activity

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Definitions:

Sarbanes-Oxley

A U.S. federal law enacted to protect investors by improving the accuracy and reliability of corporate disclosures, made in response to financial scandals.

Public Confidence

The level of trust and belief that the general public has in the stability and integrity of a financial market, institution, or economy.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Voucher System

An internal control mechanism in accounting that involves the use of vouchers to record transaction details prior to disbursement of funds.