Which of the Following Is False Concerning Relevant Costs and Relevant

question 17

Multiple Choice

Which of the following is False concerning relevant costs and relevant revenues?

• A) Every decision deals with the future.
• B) Nothing can be done to alter past costs or revenues.
• C) Historical costs may be useful for predicting future costs.
• D) Historical costs in themselves are irrelevant to a decision on future costs.
• E) Total differential costs include both relevant and irrelevant costs.

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Definitions:

Ratio Computation

The process of calculating financial ratios, which are mathematical tools used to analyze and compare financial statements.

Income Before Taxes

A financial measure indicating the profitability of a company before accounting for its tax expense.

Income Tax Expense

The total amount of income tax a company expects to pay to tax authorities, reflecting the cost of taxes on its pre-tax income.

Discontinued Operations

Components of a business, such as a department or segment, that have been disposed of or sold.