What Is the Major Purpose of the Statement of Net

question 27

Multiple Choice

What is the major purpose of the statement of net position from a financial analysis perspective?

• A)to describe the major sources of revenue and types of expense
• B)to show the inflows and outflows of cash during the reporting period
• C)to show whether the entity was efficient and effective in delivering services
• D)to provides information about the entity's liquidity and financial flexibility

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Definitions:

Fixed Overhead Spending Variance

This metric measures the difference between the actual fixed overhead costs incurred and the budgeted (or standard) fixed overhead costs.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost for the actual level of activity.

Performance Evaluation

The process of assessing the effectiveness and efficiency of individuals, teams, or systems within an organization.

Budgets

Financial plans that estimate income and expenditures for a specific period of time, often used by businesses and individuals for planning purposes.