Operating Income Determined Using Absorption Costing Can Be Reconciled to Operating

question 17

Multiple Choice

Operating income determined using absorption costing can be reconciled to operating income determined using variable costing by computing the difference between which of the following?

• A) Fixed manufacturing overhead costs deferred in or released from inventories.
• B) Discretionary costs included in the beginning and ending inventories.
• C) Gross margin (absorption costing method)and contribution margin (variable costing method).
• D) Sales as recorded under the variable costing method and sales as recorded under the absorption costing methoD.

Identify the most marketable money market securities and their features.

Comprehend the concept of earning interest on T-bills and other short-term securities.

Recognize major global stock market indexes and their measurement criteria.

Describe the roles and functions of central bank deposits and money market instruments.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including a balance sheet, income statement, and cash flow statement.

Financial Leverage

The use of borrowed funds to finance the acquisition of assets, with the expectation that the income or capital gains from the assets will exceed the cost of borrowing.

Cash Ratio

A liquidity metric that measures a company's ability to pay off short-term liabilities with its cash and cash equivalents.

Debt/Equity Ratio

An index reflecting financial leverage through a company's total debts divided by the equity of its shareholders.