Which of the Following Statements Are Correct Concerning the Accounting

question 18

Multiple Choice

Which of the following statements are correct concerning the accounting break-even point? I.The net income is equal to zero at the accounting break-even point.
II) The net present value is equal to zero at the accounting break-even point.
III) The quantity sold at the accounting break-even point is equal to the total fixed costs plus
Depreciation divided by the contribution margin.
IV) The quantity sold at the accounting break-even point is equal to the total fixed costs divided by
The contribution margin.

• A)I and III only.
• B)I and IV only.
• C)II and III only.
• D)II and IV only.
• E)I, II, and IV only.

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Definitions:

Primary Quality

Fundamental or inherent characteristics that determine the value or usefulness of something.

Model of Business Reporting

A framework or standard outlining the principles and requirements for presenting financial and non-financial information about a company's performance and position.

Financial Data

Information about financial transactions, assets, liabilities, revenues, and expenses of a business or individual.

Recognition Principles

The criteria and rules that govern when and how revenue and expenses are recognized in the accounting period they occur.