Assuming That None of the Following Have Been Disclosed in the Financial

question 7

Multiple Choice

Assuming that none of the following have been disclosed in the financial statements, the most appropriate item for footnote disclosure is the

• A) Collection of all receivables subsequent to year end
• B) Revision of employees' pension plan
• C) Retirement of president of company and election of new president
• D) Material decrease in the advertising budget for the coming year and its anticipated effect upon income

---

Definitions:

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, reflecting changes in material prices.

Materials Quantity Variance

The gap between the actual and expected quantities of materials used in production, with each difference multiplied by the standard unit cost.

Raw Materials Purchase

The acquisition of basic materials needed for the production of goods, a critical input in the manufacturing process.

Raw Materials Inventory

The stock of basic materials that are required to manufacture goods, held by a company awaiting to be used in the production process.