When a Management Report Is Discretionary Rather Than Mandatory,the Primary

question 70

Multiple Choice

When a management report is discretionary rather than mandatory,the primary consideration should be

• A) that there are benefits to be obtained by producing the report.
• B) that the benefits obtained by producing the report exceed the cost of its production.
• C) to minimize the cost of producing the report while maintaining minimum standards of usefulness.
• D) to minimize the cost of producing the report while maintaining minimum standards of reliability and accuracy.

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Definitions:

Warranty Expenses

Costs that a company anticipates it will incur as a result of repairing or replacing products under warranty.

Income Statement

A financial report detailing a company's financial performance, including all income and expenses, ultimately showing the profit or loss over a defined time.

FICA Tax Rate

The percentage of an employee's gross earnings required by law to be withheld by the employer for Social Security and Medicare taxes in the United States.

Federal Income Tax

The tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.