Activity-Based Costing Is the Tool Used in an ABM Environment

question 77

True/False

Activity-based costing is the tool used in an ABM environment to assign activity costs to cost objects. Balance sheets can be created for any cost object of an organization.

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Definitions:

Accrual of Earnings

The accrual of earnings refers to the recognition of revenues and expenses when they are earned or incurred, regardless of when cash transactions occur.

Dividends

Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits, reflecting the shareholders' ownership in the company.

Equity Method

An accounting technique used by a company to record its investment in another company, where the investment represents a significant influence over the investee.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after elimination of inter-company transactions and accounts.