Which of the Following Statements About Comparability Is True

question 32

Multiple Choice

Which of the following statements about comparability is true?

• A) A company has to use the same accounting methods in all parts of a company.
• B) The same depreciation method should be employed for all assets of a company.
• C) The same accounting methods must be used as those used by other companies in the industry.
• D) None of the answers provided.

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Definitions:

Resource Maximization

It is the technique or strategy of optimally utilizing resources to achieve the highest possible output or efficiency.

Least-costly Combination

A perfect combination of resources that lowers the production cost while reaching a target output level.

Profits

Financial gains realized when the revenues from business activities exceed the expenses, costs, and taxes needed to sustain the operation.

Profit-maximizing Combination

An optimal mix of inputs or factors of production that results in the highest possible profit for a firm, given the costs and available resources.