What Is the Margin of Safety

question 61

Multiple Choice

What is the margin of safety?

• A)planned unit sales minus break-even unit sales
• B)actual unit sales minus planned unit sales
• C)sales price minus fixed expenses
• D)equals contribution margin

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Definitions:

Unadjusted Trial Balance

A preliminary report that lists all accounts and their balances before any adjustments are made for accruals, deferrals, and errors.

Proper Order

A systematic arrangement or sequence that things follow which conforms to a set of rules or a standard procedure.

Accounts

Records within financial accounting that track financial transactions of a specific type, such as assets, liabilities, equity, expenses, and revenues.

Trial Balance Totals

The sum of all debit and credit balances in a trial balance, used to verify that the total debits equal total credits in double-entry bookkeeping.