Debits Are Used to

question 167

Multiple Choice

Debits are used to

• A) decrease both asset and liability accounts
• B) decrease liability accounts and increase asset accounts.
• C) increase both asset and liability accountss.
• D) increase liability accounts and decrease asset accounts.

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Definitions:

Cost Driver

A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.

Activity Variances

Differences between planned activities (budgeted) and actual activities in management accounting, used for monitoring performance and guiding decisions.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level, allowing for better budgetary control under different operational circumstances.

Actual Activity

The real measure of activity achieved in a given period, such as units produced, machine hours, or labor hours.