Which of the Following Statements Is TRUE

question 54

Multiple Choice

Which of the following statements is TRUE?

• A) The lure of stock market riches gives entrepreneurs an incentive to develop new products.
• B) Stock markets allow incompetent managers to be replaced by more competent managers.
• C) Stock prices provide information on whether the firm is making good decisions.
• D) All of these statements are true.

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Definitions:

Standard Quantity

The expected amount or volume of a specific input or material required in the production of goods or services.

Materials Price Variance

The difference between the actual cost of materials and the expected cost based on standard pricing, used to evaluate cost management.

Purchasing Department

A division within a business that is responsible for acquiring goods and services needed for operations.

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used for budgeting and performance evaluation.