Which of the Following Statements Is False

question 98

Multiple Choice

Which of the following statements is false?

• A) A cost can be defined as a direct cost if the bookkeeping system can keep track of how much of the cost was consumed by the cost object
• B) Whether a cost is direct or indirect cannot be determined until the cost object has been defined
• C) If the cost object is a batch of 1000 units of production, then factory property taxes could be a direct cost if the bookkeeping system is detailed enough
• D) Some indirect costs might have been considered direct costs if a company had better technology for capturing information

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Definitions:

FICA Tax

Federal Insurance Contributions Act tax used to finance federal programs for old-age and disability benefits (social security) and health insurance for the aged (Medicare).

Payroll Tax

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.

Interest-Bearing Note

A debt security that pays interest to the holder, typically at a fixed rate, until maturity.

Deducts

Refers to the act of subtracting an amount from a total, often used in accounting and finance to calculate net values.