Which of the Following Underlying Assumptions for the Conceptual Framework

question 158

Multiple Choice

Which of the following underlying assumptions for the conceptual framework is the reason the dollar is used in the preparation of financial statements?

• A)Economic Entity
• B)Continuity
• C)Time-Period
• D)Monetary Unit

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Definitions:

Variable Cost

A cost that changes in proportion to the level of activity or volume of output.

Wages And Salaries

Compensation paid to employees for their labor, with wages typically being hourly rates and salaries being fixed annual amounts.

Activity Variance

The difference between the budgeted amount of activity and the actual amount of activity, which can impact costs and operational efficiency.

Cost Formula

An equation used to predict costs at various levels of activity, incorporating both fixed and variable cost components.