Voluntary Option Expensing Has Been Found to Have Which of the Following

question 6

Multiple Choice

Voluntary option expensing has been found to have which of the following effects?

• A)A negative impact on share price.
• B)A positive impact on share price.
• C)No impact on share price.
• D)A positive impact if LIFO accounting is used and a negative effect if FIFO accounting is used.

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Definitions:

Budget Committee

A group responsible for coordinating the preparation of the budget, reviewing and approving budget proposals, and monitoring financial performance.

Master Budget

A master budget is a comprehensive financial planning document that combines all of an organization's individual budgets and plans into a single, unified plan.

High-Low Method

A mathematical method that uses the total costs incurred at the high and low levels of activity to classify mixed costs into fixed and variable components.

Mixed Cost

A cost composed of a fixed and a variable component and changes in total with the level of activity, but not proportionally.