The Chart of Accounts Is an Important Control Because It

question 11

Multiple Choice

The chart of accounts is an important control because it provides the framework for determining the information presented to management and other financial statement users.What type of error is the chart of accounts helpful in preventing?

• A)errors of occurrence
• B)errors of completeness
• C)errors of accuracy
• D)errors of classification

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Definitions:

Selling Price

The amount for which a product is sold to the customer, generally set above the cost to include a profit margin.

Margin Of Safety

The difference between actual or expected sales and sales at the break-even point, measured in either units or revenue.

Break-Even Point

The quantity of production or sales at which total revenues equal total expenses, resulting in no net loss or gain.

Variable Expenses

Costs or expenses that vary in direct proportion to changes in business activity levels, such as sales volumes or production output.