A Company Can Change to a New Accounting Principle If

question 93

Multiple Choice

A company can change to a new accounting principle if management can justify that the change will result in

• A) less likelihood of clerical errors.
• B) higher net income.
• C) lower net income for tax purposes.
• D) more relevant information for decision-making.

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Definitions:

Spending Variance

The difference between the actual spending and budgeted or expected spending, used to assess financial management and cost control.

Direct Materials

Materials that are directly traceable to the production of a specific product.

Tenant-Days

A measure used in the hospitality or rental sector representing the total number of days rented out to tenants.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular period.