If a Cost Object Such as a Product or Customer

question 4

Multiple Choice

If a cost object such as a product or customer has a positive green margin, then:

• A) its red margin will be positive.
• B) its red margin may be either positive, negative, or zero.
• C) its red margin will be negative.
• D) its red margin will be zero.

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Definitions:

Commercial Substance

A concept in accounting that occurs when the future cash flows or the economic circumstances of a transaction change as a result of the transaction.

Disposal

The act of getting rid of an asset through sale, trade, abandonment, or other methods, often resulting in the recognition of a gain or loss for accounting purposes.

Book Value

Book value is the net value of a company's assets as recorded on its balance sheet, often contrasted with market or actual value.

Annual Report

A comprehensive document detailing a company's activities and financial performance throughout the preceding year.