Which of the Following Describes the Selling and Administrative Expenses

question 133

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 shows the cash flows related to the selling and administrative expenses and helps in planning to ensure the business has adequate cash.

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Definitions:

Ownership Interest

Represents the percentage of an entity owned by a specific investor or shareholders.

Equity Method

An accounting technique used to record investments in which an investor has significant influence but does not have majority control, representing the investment's value based on the investor's share of the investee's equity.

Open Market

A system where securities, commodities, or currencies are traded freely between buyers and sellers, with prices based on supply and demand.

Common Shares

Equity securities that represent ownership in a company, entitling holders to a share of the corporation's profit via dividends and voting rights.