Which of the Following Is Not a Benefit of Activity-Based

question 52

Multiple Choice

Which of the following is not a benefit of activity-based costing?

• A) lower cost
• B) better decisions
• C) improved cost management
• D) identification of cost drivers

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Definitions:

Bad Debt Expense

An expense reported on the income statement, representing the portion of receivables that is estimated not to be collectible.

Loan Receivables

Reflects the amounts of money lent out that are expected to be repaid, typically generating interest income for the lender.

Accounting Flexibility

The range of choices that management has under GAAP (Generally Accepted Accounting Principles) in how to report financial activity.

Contract Constraints

Limitations or conditions in a contract that restrict the actions of the parties involved.