In Using More Sophisticated Planning Models, Which One of the Following

question 11

Multiple Choice

In using more sophisticated planning models, which one of the following statements is NOT true?

• A) Current liabilities are likely to vary directly with sales.
• B) Long-term liabilities and equity accounts change as a direct result of managerial decisions.
• C) Retained earnings will vary as sales changes but not directly as it is affected by the company's dividend payout policy.
• D) All of the above are true

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Definitions:

Substantially Completes Performance

This term refers to a situation in which a party has completed a major portion of its obligations under a contract, meeting a threshold that often allows for recognition of revenue or fulfillment obligations.

Earned

Describes income that has been generated from work, investment, or business operations and has thus contributed to net income.

Contract

A legally enforceable agreement between two or more parties with explicit terms and conditions.

Discontinued Operations Section

A section in the financial statements that reports the results of operations that have been discontinued by a company.