Which of These Is NOT a Criticism of Historical Cost

question 6

Multiple Choice

Which of these is NOT a criticism of historical cost accounting?

• A)Historical cost overstates profit in times of rising prices.
• B)It is not objective and is open to manipulation.
• C)It has been used by business over many centuries.
• D)Cost information is not always available.

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Definitions:

Overhead Costs

General business expenses not directly attributable to creating products or services.

Departments

Distinct areas within an organization, each focusing on a specific aspect of the business operation, such as finance, marketing, or human resources.

Products

Goods or services offered by a business to the market.

Product Costs

The costs incurred by a company to manufacture or acquire a product which include materials, labor, and overhead.