Which of the Following Statements Is True of the Trends

question 1

Multiple Choice

Which of the following statements is true of the trends in operating business organizations?

• A) Public attention is moving away from the formation of benefit corporations.
• B) Shareholders are losing interest and are becoming less active.
• C) In comparison to corporations, sole proprietorships are becoming harder to create.
• D) In many cases, corporations and individuals reasonably have an equal claim to rights and protections under the law.
• E) Sole proprietorships and partnerships are now being treated as a taxable entity if they generate more than $100,000 in revenue.

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Definitions:

Absorption Costing

A technique in accounting that rolls all manufacturing expenses including direct material costs, direct labor, and every overhead, regardless if fixed or variable, into the overall cost of a product.

Unit Product Cost

The overall expense involved in creating one unit of a product, encompassing direct materials, direct labor, and distributed overhead costs.

Absorption Costing

An accounting method that includes all manufacturing costs (both variable and fixed) in the cost of a product.

Variable Costing

An accounting method that includes only variable costs in product cost calculations and treats fixed costs as period costs.