​Which of the Following Is True of Nonvalue-Added Activities

question 56

Multiple Choice

​Which of the following is true of nonvalue-added activities?

• A) Nonvalue-added activities are all activities other than those that are absolutely essential to remain in business.
• B) Nonvalue-added activities are necessary to comply with legal mandates.
• C) Nonvalue-added activities enable other activities to be performed.
• D) Nonvalue-added activities help meet the organization's needs, not the product needs.

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Definitions:

Discontinued Component

A segment or unit of a business that has been sold off, ceased operations, or is classified as held for sale, and is reported separately in the financial statements.

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating how much a company earns from its core business activities.

Multiple-Step Income Statement

A comprehensive income statement that separates operating revenues and expenses from non-operating ones, providing a detailed view of a company's financial activities.

Single-Step Income Statement

An income statement format that deducts total expenses from total revenues with one calculation, to find the net income.