Which of the Following Statements Is True

question 68

Multiple Choice

Which of the following statements is true?

• A) Indirect costs can easily be traced to a cost object; direct costs cannot be easily traced to a cost object.
• B) Both direct and indirect costs can easily be traced to a cost object.
• C) Neither direct nor indirect costs are easily traced to a cost object.
• D) Direct costs can be traced easily to a cost object, but indirect costs cannot be easily traced to a cost object.

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Definitions:

Perpetual Inventory Method

An inventory management system where adjustments to inventory accounts are made continuously as transactions occur.

Bank Credit Card

A payment card issued by a bank allowing cardholders to purchase goods and services on credit.

Income Statement Relationships

The relationships within an income statement involve how revenues, expenses, and profits interact and affect each other to show a company's financial performance over a period.

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and thus are written off as a bad debt expense.