Which Item Does Not Normally Require Accountants to Exercise a Significant

question 8

Multiple Choice

Which item does not normally require accountants to exercise a significant degree of professional judgement to determine its amount?

• A) Doubtful debts
• B) Depreciation
• C) Cost of goods sold
• D) Interest

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Definitions:

Cost Effectiveness

A measure that evaluates the cost and benefits of a project or decision to determine the best resource allocation.

Flexibility

Flexibility in business refers to the ability of a company to adapt quickly to changes in the market or environment, including adjusting processes, products, or strategies to meet new circumstances.

Special Journal

A specialized accounting journal used to record and post transactions of a similar type.

Subsidiary Ledger

A detailed ledger that provides a breakdown of transactions relating to a specific account, which then rolls up into the general ledger.