Which of the Following Statements Is TRUE

question 28

Multiple Choice

Which of the following statements is TRUE?

• A) Working capital and fixed costs act like a variable cost
• B) Working capital and fixed assets act like a fixed cost
• C) Working capital acts like a variable cost; fixed assets act like a fixed cost
• D) Working capital acts like a fixed cost; fixed assets act like a variable cost

Comprehend the differences between the cash basis and the accrual basis of accounting.

Identify the types of accounts that typically require adjusting entries.

Calculate the correct amounts for adjusting entries related to payroll expenses.

Recognize the impact of adjusting entries on the balance sheet and income statement.

---

Definitions:

Relative Standing

A measure or ranking of a value or observation within the context of a larger set of data or population.

Observation

An act of recording the occurrence or existence of a specific entity or phenomenon.

Box and Whisker Plot

A graphical representation of data that highlights the median, quartiles, and extremes of the dataset.

Five-number Summary

A statistical summary of a data set that includes the minimum, first quartile, median, third quartile, and maximum.