In Order to Choose the Proper Activity Base for a Cost

question 14

True/False

In order to choose the proper activity base for a cost, managerial accountants must be familiar with the operations of the entity.

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Definitions:

Disbursements

Payments made by a business, including expenses, cash distributions to shareholders, or investments.

Financing

The act of supplying capital for company operations, acquisitions, or investment activities.

Collections from Customers

The process or total amount of money received from customers in payment for sales of goods or services.

Cash Collected

The total amount of cash received by a company during a specific period.