Which of the Following Statements Is True Regarding the Traceability

question 56

Multiple Choice

Which of the following statements is true regarding the traceability of direct costs?

• A) Source documents can be used to link a resource to a specific cost object.
• B) The accuracy of the costs of the cost object are increased by the more costs that can be directly traced.
• C) Entities should only commit resources to trace costs if such costs are deemed important or the cost of tracking is minimal.
• D) All of the statements are true.

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Definitions:

Inside The Frontier

A condition in which an economy is not operating at its full productive capacity, implying underutilization of resources.

Inefficiency Or Unemployment

Situations where resources are not fully utilized in the economy, leading to joblessness and wastage of economic potential.

Bowed-Out Frontier

A graphical representation of an economy’s maximum output possibilities that show increasing opportunity costs, resulting in a curve that bows outward.

Opportunity Cost

The value of the best alternative forgone when a decision is made to choose one option over others.