Which of the Following Problems Arise When Managers Fail to Keep

question 71

Multiple Choice

Which of the following problems arise when managers fail to keep accounting records on the accrual basis?

• A)The time period for measuring the independent variable does not properly match the period for measuring the cost driver.
• B)Costs such as depreciation,insurance,or rent may be allocated to products to calculate cost per unit of output.
• C)Marketing costs may be understated because costs of sales visits to customers may be incorrectly recorded as customer-service costs.
• D)Extreme values of observations occur.
• E)A homogeneous relationship exists when each activity whose costs are included in the dependent variable.

---

Definitions:

Year-End Price

The market price of a stock or any other security on the last trading day of the year.

Price Index

A measure that examines the average change in prices of goods and services over time in an economy.

Dollar-Value LIFO

An inventory valuation method that uses the last-in-first-out (LIFO) principle, adjusted for changes in the dollar's value, to account for inflation.

Year-End Price

The final market price of a security or an asset on the last trading day of the fiscal year.