Which of the Following Is True Regarding Variances

question 128

Multiple Choice

Which of the following is true regarding variances?

• A) Unfavorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage.
• B) Favorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage.
• C) Unfavorable variances are always credits.
• D) Favorable variances are always debits.
• E) None of these.

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Definitions:

Sales Revenues

The total amount of income generated by a company from its sales of goods or services, before any expenses are deducted.

Credit Sales

Transactions where goods or services are sold and payment is received at a later date.

Goods Transferred

The process of moving goods from one location to another, often referring to the change in ownership of inventory from seller to buyer.

Refund Liability

Refund Liability is an obligation arising from the potential need to repay customers for returned or unsatisfactory goods and services.