Accrual Adjustments Link

question 62

Multiple Choice

Accrual adjustments link:

• A)assets and revenues moving in the same direction or liabilities and expenses moving in the same direction.
• B)assets and expenses moving in the same direction or liabilities and revenues moving in the same direction.
• C)assets and revenues moving in the opposite direction or liabilities and expenses moving in the opposite direction.
• D)assets and expenses moving in the opposite direction or liabilities and revenues moving in the opposite direction.

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Definitions:

Activity Base

A measure upon which the allocation of costs is based in activity-based costing, often relating to a metric that causes costs to occur such as machine hours or labor hours.

Cost Behavior

The way in which costs change in relation to variations in an organization’s activity level.

Variable Costs

Costs that change in proportion to the level of production or sales, such as raw materials and direct labor.

Activity Level

A measurement of the volume of production or the quantity of services provided.