Which of the Following Activities Is Least Likely to Be

question 152

Multiple Choice

Which of the following activities is least likely to be limited to "year-end"?

• A) Closing the accounts.
• B) Drafting notes to accompany statements.
• C) Recording routine transactions.
• D) Undergoing an audit.

---

Definitions:

Operating Leverage

The degree to which a company uses fixed operating costs, with all else being equal, the higher the operating leverage, the more sensitive net operating income is to a given percentage change in sales.

Cost-Volume-Profit Graph

A graphical representation that shows the relationship between the total cost, total revenue, and level of output or volume, to analyze the profitability at different levels of operation.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, showing the revenue available to cover fixed expenses and provide profit.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, demonstrating the effect of fixed costs on profits.