The Account Analysis Method Estimates Cost Functions ________

question 113

Multiple Choice

The account analysis method estimates cost functions ________.

• A) by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis
• B) using time-and-motion studies
• C) at a high cost, which renders it seldom used
• D) in a manner that cannot be usefully combined with any other cost estimation methods

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Definitions:

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transaction occurs.

Double-entry Accounting

An accounting method that records each transaction twice, as both a debit and a credit, to ensure the accounting equation remains balanced.

Accounting Equation

The fundamental formula in accounting that represents the relationship between assets, liabilities, and owner's equity: Assets = Liabilities + Owner's Equity.

Net Worth

The total assets minus total liabilities of an individual or entity, representing financial position at a specific time.