Which of the Following Statements Regarding Advertising Is FALSE

question 39

Multiple Choice

Which of the following statements regarding advertising is FALSE?

• A)Advertising may not create false or unjustified expectations of favorable results.
• B)Advertising may not imply the ability to influence any court,tribunal,regulatory agency,or similar body or official.
• C)Advertising may contain a fee estimate even if the public accountant (PA)knows it is likely to be substantially increased.
• D)Advertising may not contain any representation that is likely to cause a reasonable person to misunderstand or be deceived,or that contravenes professional good taste.

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Definitions:

Standard Variable Overhead Rate

The predetermined rate at which variable overhead costs are expected to be incurred relative to a certain measure of activity, such as labor hours.

Direct Labour Hours

Direct Labour Hours represent the amount of time spent by workers directly involved in manufacturing a product or providing a service.

Variable Overhead

Indirect operating costs that change in proportion to the level of production or business activity.

Total Variable Overhead Variance

The difference between the actual variable overhead incurred and the standard variable overhead allocated for the output achieved.