Managers Go Through a Series of Questions to Decide Whether

question 101

Multiple Choice

Managers go through a series of questions to decide whether to use past costs to estimate future costs. Which of the following questions is least likely to be one of them?

• A) Is the cost relevant to the decision?
• B) Is the cost highly discretionary?
• C) Is the cost an engineered estimate?
• D) Is the cost expected to change?

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Definitions:

Subsidiary Ledger

A detailed ledger that provides a breakdown of information summarized in the general ledger, often for accounts like Accounts Receivable or Accounts Payable.

Sales Returns And Allowances

A reduction in sales revenue resulting from customers returning goods or receiving discounts for faulty or unsatisfactory products.

Sales Tax Payable

An account responsible for tracking the sales tax gathered from buyers, due to be paid to the authorities.

Accounts Receivable

Funds that customers owe to a business for goods or services already provided but not yet compensated for.