Which of the Following Is an Incorrect Statement Regarding Variances

question 28

Multiple Choice

Which of the following is an incorrect statement regarding variances?

• A) A variance is favorable when expected sales are more than actual sales.
• B) A variance is a difference between budgeted and actual amounts.
• C) A variance can be calculated for both revenues and expenses.
• D) A variance can be both favorable and unfavorable.

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Definitions:

Spendthrift Trust

A trust created to protect the beneficiary from spending all the funds to which she or he is entitled. Only a certain portion of the total amount is given to the beneficiary at any one time, and most states prohibit creditors from attaching assets of the trust.

Grantor

An individual or entity that grants or transfers an interest in real property to another through a deed or other legal instrument.

Health-Care Powers

Legal authority granted to an individual (through a document or decree) to make medical decisions on behalf of another person.

Living Trust

A trust created by the grantor (settlor) and effective during his or her lifetime.