Standards Are Important in the Control Process Because They

question 21

Multiple Choice

Standards are important in the control process because they

• A) help create the flexibility needed for an organization to function effectively.
• B) provide a way to group activities.
• C) set the strategy for use of resources.
• D) define the dimensions for what is expected to happen.

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Definitions:

Total Expenses

The sum of all costs and expenses incurred by a business during a specific period of time.

Cost of Goods Sold

The immediate expenses linked to creating products sold by a business, covering both materials and workforce costs.

Net Method

An accounting method where discounts for prompt payment are assumed in the recorded costs; if the discount is not taken, the expense is recorded later.

Cash Discount

A deduction from the invoice price that a seller allows to a buyer in return for paying the bill early.