Activity-Based Costing and Generally Accepted Accounting Principles Differ in That

question 126

Multiple Choice

Activity-based costing and generally accepted accounting principles differ in that ABC

• A)does not define product costs in the same manner as GAAP.
• B)cannot be used to compute an income statement,but GAAP can.
• C)is concerned only with costs generated from automated processes,but GAAP is concerned with costs generated from both manual and automated processes.
• D)information is useful only to managers,while GAAP information is useful to all organizational stakeholders.

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Definitions:

Common Stock

A type of equity ownership in a corporation, with voting rights and potential for dividends, representing a share in the company's profits and losses.

Additional Paid-in Capital

Additional Paid-in Capital is the amount of money paid by investors for shares in a company above the par value of those shares. It represents extra equity capital invested in the company.

Par Value

A nominal value assigned to a security by the issuer, often used to determine the minimum price of shares issued by a corporation.

Fair Value

The trading price of an asset or the funding needed to transfer a liability in a well-coordinated market move at the assessment point.