The Controller for Navia, Inc

question 46

Multiple Choice

The controller for Navia, Inc.created a budget prior to the current period.At the end of the period, the controller compared the budget with the actual results.For what purpose is the controller using budgets?

• A)Coordination
• B)Control
• C)Variances
• D)Planning

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Definitions:

Conservatism

An accounting principle that advises caution, directing accountants to choose methods and estimates that are least likely to overstate assets and income.

Fair Value Accounting

An accounting approach that measures and reports assets and liabilities at their estimated market prices.

Financial Crises

A situation where the value of financial institutions or assets drops significantly, often characterized by panicked selling and loss of confidence in the financial system.

Accounting Standards Codification

The collection and integration of the authoritative accounting standards for U.S. GAAP.