The Accounting Principle That Prescribes an Accounting Information System to Report

question 8

Multiple Choice

The accounting principle that prescribes an accounting information system to report useful, understandable, timely, and pertinent information for effective decision-making is the:

• A) Control principle.
• B) Compatibility principle.
• C) Relevance principle.
• D) Flexibility principle.
• E) Cost-Benefit principle.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead rate incurred during a period and the standard variable overhead rate, multiplied by the actual activity level.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated based on the actual levels of the allocation base.

Lubricants

Substances applied to reduce friction and wear between surfaces in mutual contact, often used in machinery and equipment to ensure smoother operation.

Supplies

Items or materials used in the operation of a business and often classified as a type of inventory on the balance sheet.