The Finance Balance Sheet Is

question 40

Multiple Choice

The finance balance sheet is

• A) the same as the accounting balance sheet, but it is based on market values.
• B) the same as the accounting balance sheet, but it does not have to balance.
• C) based on cash rather than accrual accounting.
• D) the same as the accounting balance sheet, but it is based on historical values.

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Definitions:

Absorption Costing

A method of accounting for costs in which all costs of manufacturing a product, including fixed and variable overheads, are absorbed by the products produced.

Fixed Overhead

Regular, ongoing costs incurred by a business that do not vary with production levels, such as rent, salaries, and insurance.

Period Cost

A financial term referring to costs that are not directly tied to the production process and are expensed in the period in which they are incurred.

Sales Revenues

The revenue a company earns from selling products or offering services.