Making Notes in the Financial Statements to Explain the Justification

question 113

Multiple Choice

Making notes in the financial statements to explain the justification of valuation changes and other financial decisions would be an example of:

• A)conservatism.
• B)consistency.
• C)materiality.
• D)full disclosure.

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Definitions:

Cost Improvement Opportunities

Areas identified within a business process or operation where reductions in cost can be made without compromising the quality or performance of the product or service.

Activity-Based Costing

A costing methodology that allocates overhead costs to specific products or services based on their consumption of resources or activities.

Factory Overhead Cost

Costs associated with manufacturing operations that cannot be directly traced to specific products, including expenses like utilities and maintenance for production facilities.

Activity Allocations

This refers to the process of assigning costs to specific cost objects based on their use of activities, often used in management accounting for better cost control.