In Order for Accounting Information to Be Useful in Making

question 135

Multiple Choice

In order for accounting information to be useful in making informed decisions,it must be

• A)relevant.
• B)reliable.
• C)neither relevant nor reliable.
• D)both relevant and reliable.

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Definitions:

Conversion Costs

Sum of labor costs and overhead expenses associated with the transformation of raw materials into finished goods.

First-In

Typically part of the phrase "First-In, First-Out" (FIFO), a method used to assign costs to inventory on the basis that the first items entered into inventory are the first sold.

Equivalent Units

A term used in cost accounting to denote a conversion measure that expresses the amount of work done on partially completed units in terms of fully completed units.

Conversion Cost

The cost associated with converting raw materials into finished products, typically including labor and overhead expenses.