Which of the Following Statements Is True

question 118

Multiple Choice

Which of the following statements is true?

• A) A favourable variance always benefits a company.
• B) Managers attempt to maintain unfavourable variances.
• C) Favourable variances are typically not preferred by management.
• D) Only a flexible budget can be used to determine a variance.
• E) A favourable variance is not always beneficial for an organization.

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Definitions:

Selling Price

The amount of money for which a product or service is offered for sale to customers.

Accrued Sales Revenues

Revenues earned during a period but not yet received in cash or recorded at the statement date.

Unearned Sales Revenues

Money received by a company for products or services yet to be delivered or performed, considered a liability until earned.

Cash Collected

Revenue that has been received by a company from its various business activities, such as sales or services.