Which of the Following Events Would Be an Example of an Event

question 22

Multiple Choice

Which of the following events would be an example of an event that casts doubts on the going concern status of the business?

• A) several major customers find an alternative supplier
• B) resignation of an employee
• C) forward payment to a major supplier
• D) directors decide on no final dividend

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Definitions:

Absorption Costing

The product cost determination method under this accounting strategy includes the expenses for direct materials, direct labor, and all manufacturing overhead, whether it is variable or fixed.

Gross Margin

A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs and treats fixed manufacturing overhead as an expense of the period.

Period Cost

Expenses that are not directly tied to production activity and are expensed in the period in which they are incurred.