Once a Company Compares Its Actual Performance to Performance Standards

question 44

Multiple Choice

Once a company compares its actual performance to performance standards, the next step it should take in the control process is to:

• A) set its goals.
• B) identify performance deviations.
• C) benchmark performance standards.
• D) ensure suboptimization.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from total revenue.

Income Distribution

The allocation of earned income or revenue to various stakeholders, such as dividends to shareholders or wages to employees.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was put into use, representing how much of its value has been used up.

Allowance

A provision in accounting for a reduction in the value of receivables or inventories, often related to potential bad debts or damaged goods.