Which of the Following Statements Is True Regarding Accountability

question 47

Multiple Choice

Which of the following statements is true regarding accountability?

• A)Accountability refers to a narrower concept than does stewardship.
• B)Measurements based on the accountability objective include earnings per share but not return on investment.
• C)The question of which valuation system provides the best input for accountability-oriented measurement is unimportant.
• D)Accountability refers to the responsibility of management to report on achieving goals for the effective and efficient utilization of enterprise resources.

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Definitions:

Denominator Level

The activity level used to compute a predetermined overhead rate, often reflecting capacity or expected usage.

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.

Unfavorable

A term used in budgeting and variance analysis to describe a situation where actual costs are higher than expected or budgeted costs.