The Primary Function of Financial Accounting Is to Provide Relevant

question 39

True/False

The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises.

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Definitions:

Direct Labour Rate Variance

The difference between the actual cost of direct labor and the standard cost, which shows how well labor costs are being managed.

Direct Labour Efficiency Variance

The difference between the expected amount of labor hours needed to produce a given level of output and the actual labor hours used.

Favourable Variances

Differences between actual costs and budgeted costs that result in a better-than-expected financial performance, often indicating cost savings or higher revenues.

Large Variances

Significant differences between planned and actual figures in a budget, project, or any performance measurement, indicating greater deviations from expectations.