Which of the Following Statements Is CORRECT

question 424

Multiple Choice

Which of the following statements is CORRECT?

• A) As output increases, total cost and total fixed cost increase by the same amount.
• B) As output increases, total cost and total fixed cost increase but not necessarily by the same amount.
• C) As output increases, total cost increases and total fixed cost decreases.
• D) Total fixed cost plus total variable cost equals total cost.

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Definitions:

Business Transactions

Economic events that are recorded in the financial statements of an entity because they affect the financial position of the company, involving the transfer of value between two or more parties.

Journal

A chronological record of all financial transactions, used to transfer information to a company's ledger.

Ledger

A book or collection of financial accounts of a particular type, often referred to as the final book of entry where transactions are summarized.

Trial Balance

A trial balance is a bookkeeping report that lists the balances in each of an organization's general ledger accounts to check the mathematical accuracy of the accounting entries.