Which of the Following Describes the Selling and Administrative Expenses

question 4

Multiple Choice

Which of the following describes the selling and administrative expenses budget?

• A)It aids in planning to ensure the company has adequate inventory on hand.
• B)It captures the variable and fixed components of selling and administrative expenses of the business.
• C)It depicts the breakdown of sales based on terms of collection.
• D)It helps in planning to ensure the business has adequate cash.

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Definitions:

Sarbanes-Oxley Act

The Sarbanes-Oxley Act is a U.S. law enacted in 2002 to protect investors from potential fraudulent activities by corporations, improving financial disclosures and preventing accounting fraud.

Auditor's Report

A formal opinion or disclaimer, issued by an independent external auditor as a result of an audit or evaluation of a firm's financial statements.

Financial Statements

Formal records that outline the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.

Unusual Item

A significant transaction or event that is infrequent in nature, distinct from the ordinary activities of the business.