A Major Difference Between Functional Accounts and Natural Accounts Is

question 1

Multiple Choice

A major difference between functional accounts and natural accounts is that functional accounts

• A) are based on the contribution-margin approach and natural accounts are based on the full cost approach.
• B) always total to a lower overall expense than the total of the natural accounts.
• C) might be used to compare the costs of serving different customers-but natural accounts are not suited to that purpose.
• D) are the basis for most accounting systems, but natural accounts are more useful for marketing managers.
• E) do not consider fixed costs, but natural accounts do.

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Definitions:

Common Stockholders' Equity

Common stockholders' equity represents the ownership interest held by common shareholders in a company, including assets minus liabilities and preferred stock equity.

Market Value

The ongoing rate at which an asset or service can be traded or acquired in the market.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares.