Which of the Following Statements Is True

question 68

Multiple Choice

Which of the following statements is true?

• A) Indirect costs can easily be traced to a cost object; direct costs cannot be easily traced to a cost object.
• B) Both direct and indirect costs can easily be traced to a cost object.
• C) Neither direct nor indirect costs are easily traced to a cost object.
• D) Direct costs can be traced easily to a cost object, but indirect costs cannot be easily traced to a cost object.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term liquidity.

Financial Data

Numeric information representing the financial performance, position, and cash flows of a company.

Current Ratio

A metric that evaluates how well a business can handle its short-term financial commitments due within a year.

Financial Data

Quantitative information about a company's financial position, performance, and cash flow, which is used for analysis and decision-making.