What Is the Likely Result When Accounting Rules Are Left

question 12

Multiple Choice

What is the likely result when accounting rules are left up to professional associations rather than being legislated by governmental bodies?

• A) Very general accounting rules are created, as in code law countries.
• B) Very detailed rules for practice are created, as in common law countries.
• C) Very general accounting rules are created, as in common law countries.
• D) Very detailed rules for practice are created, as in code law countries.

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Definitions:

Variable Expenses

Costs that vary directly with the level of production or business activity, such as raw materials and commissions.

Selling and Administrative Expense Budget

A detailed plan that estimates the selling and administrative expenses of a business for a specific period.

Budgeted Sales

The projected amount of sales, in units or currency, expected to be achieved in a specific period, as determined by a company's budget.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products or job orders, calculated before the accounting period begins.