Which of the Statements Below Is FALSE

question 21

Multiple Choice

Which of the statements below is FALSE?

• A)We can separate short-term and long-term decisions into three dimensions: the length of impact,the cost,and the degree of information gathering prior to the decision.
• B)The longer the impact and the higher the cost associated with a decision,the greater the time and degree for gathering information on choices and the more complex the decision model.
• C)Long-term decisions are called capital budgeting decisions and are typically viewed as decisions that have long-term impacts that are not easily reversed or that can be changed only at great cost.
• D)An example of a short-term decision is determining the number of manufacturing facilities that the firm should operate.

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Definitions:

Average Cost Flow Methods

This inventory valuation method calculates the cost of goods sold and ending inventory based on the weighted average cost of all units available for sale.

Gross Profit

The financial metric calculated by subtracting the cost of goods sold from total sales revenue.

Ending Inventory

The total value of all goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.

Perpetual Inventory System

An accounting approach that continuously tracks inventory levels and costs, updating the general ledger after each receipt or sale of goods.