Variances Indicate

question 77

Multiple Choice

Variances indicate

• A) that actual performance is not going according to plan.
• B) the cause of the variance.
• C) who is responsible for the variance.
• D) when the variance should be investigated.
• E) none of these.

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Definitions:

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specific intervals, based on physical inventory counts.

Merchandise Inventory

Items that a company intends to sell to customers that are held as assets on the balance sheet.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Retail Inventory Method

An accounting method used by retailers to estimate inventory cost by using a cost-to-retail price ratio based on both beginning inventory and purchases during the period.