When Estimating Future Costs, Information Quality Is Higher When

question 55

Multiple Choice

When estimating future costs, information quality is higher when:

• A) Costs must be allocated
• B) The accounting system can trace relevant costs to a cost object
• C) The regression Adjusted R-square is near zero
• D) Most costs are fixed, rather than variable

---

Definitions:

Medium-Term Bond

A bond that has a maturity period typically ranging from one to ten years, serving as a middle ground between short-term and long-term investments.

Canada Call

A feature of certain bonds allowing the issuer to redeem the bond before maturity exclusively within Canada.

Market Risk

That part of a security’s total risk that cannot be eliminated by diversification; measured by the beta coefficient.

Maturity Date

The date when the bond’s par value is repaid to the bondholder. Maturity dates generally range from 10 to 40 years from the time of issue.