Comparing Expenses to Prior Years Is an Effective Analytical Procedure

question 45

Multiple Choice

Comparing expenses to prior years is an effective analytical procedure for accounts payable because expenses from year to year are

• A)relatively stable.
• B)erratic.
• C)variable.
• D)dynamic.

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Definitions:

Incentives

Rewards or benefits offered to encourage specific actions or behaviors, particularly in contexts of employment or economics.

Incremental Costs

The additional costs incurred when increasing the level of an activity or output by one unit.

Production Capacity

The maximum output that a manufacturing facility can produce under normal working conditions.

Opportunity Costs

The value of the best alternative forgone as a result of making a decision.