Which of the Following Statements Best Describes the Major Difference

question 15

Multiple Choice

Which of the following statements best describes the major difference between activity-based costing (ABC) and activity-based management (ABM) ?

• A)ABC is only used in manufacturing companies,and ABM is only used in service companies.
• B)ABC is used in managerial accounting,and ABM is used in financial accounting.
• C)The goal of ABC is to accurately measure costs,and the goal of ABM is to manage costly activities.
• D)ABC is only used in service companies,and ABM is only used by merchandising companies.
• E)None of the answer choices is correct.

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Definitions:

Journal Entry

A record in the accounting journal that represents a transaction and includes debits and credits.

Cash Register Overages

The situation where the amount of cash in a cash register exceeds the expected amount based on sales records.

Petty Cash Fund

A small amount of cash kept on hand within a business for minor, day-to-day expenses.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.