Which of the Following Statements Regarding Activity-Based Costing (ABC) Is

question 49

Multiple Choice

Which of the following statements regarding activity-based costing (ABC) is true?

• A) Resources consume activities and products consume costs.
• B) Activities consume resources and products consume activities.
• C) Costs consume activities and products cause costs.
• D) Resources consume activities and activities cause costs.

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Definitions:

Intangibles

Assets that lack physical substance but possess value, such as patents, copyrights, trademarks, and goodwill.

Long-term Liabilities

Obligations that a company expects to pay after one year.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest in the company.

Vertical Analysis

An approach to financial statement examination where each component within the principal groups of accounts (assets, liabilities, and equity) on a balance sheet is shown as a ratio of the overall category amount.