The Cost-Benefit Principle Indicates That an Action Should Be Taken

question 50

Multiple Choice

The Cost-Benefit Principle indicates that an action should be taken if:

• A)its total benefits exceed its total costs.
• B)its average benefits exceed its average costs.
• C)its net benefit (benefit minus cost)is zero.
• D)its extra benefit is greater than or equal to its extra cost.

Understand the perpetual inventory system including the recording process for sales and purchases of merchandise inventory and associated costs.

Calculate financial ratios such as the gross margin ratio, current ratio, and acid-test (quick) ratio, and interpret their significance regarding profitability and liquidity.

Match accounting definitions with their corresponding terms.

Differentiate between the periodic and perpetual inventory systems and understand the impact on accounting records.

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Definitions:

Incentives

Rewards or benefits offered to encourage specific behaviors or actions.

Derogatory

Expressing a low opinion or negative judgment intended to diminish the value, reputation, or esteem of a person or thing.

Employee's Demeanor

The way an employee behaves or conducts themselves at work, which can reflect on their professionalism and the company's image.

Cold

Characterized by a low temperature; often associated with discomfort or the absence of warmth in the context of weather, environments, or sensations.