A Company That Has Adopted a Volume Objective for Its

question 53

True/False

A company that has adopted a volume objective for its pricing will typically attempt to maximize sales, given that it can achieve some stated minimum acceptable profit level on those sales.

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Definitions:

Sum-Of-Years' Digits

An accelerated method of depreciation which involves allocating the cost of an asset over its useful life in a way that results in higher depreciation expense in the earlier years and lower expense in later years.

Salvage Value

The anticipated market value of an asset upon completing its service life.

Matching Principle

An accounting principle that requires expenses to be matched with the revenues they helped to generate in the same period.

Amortization

The gradual reduction of a debt over a period of time or the spreading out of capital expenses related to intangible assets over their useful life.