All Other Things Equal, It Is Profitable to Continue Processing

question 50

True/False

All other things equal, it is profitable to continue processing a joint product after the split-off point so long as the incremental revenue from further processing exceeds the incremental costs of further processing.

---

Definitions:

Accrual Accounting

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.

Current Operating Liabilities

Short-term liabilities that are incurred as part of the normal operations of a business, due within a fiscal year.

Decreases

A reduction in quantity, size, or overall value of an asset, revenue, or other financial metric.

Decreases in Current Assets

The reduction in the value or amount of the assets that a company expects to convert into cash within one year.