Which of the Following Statements Is False

question 62

Multiple Choice

Which of the following statements is false?

• A) Unfavourable variances represent the costs of producing inefficiently.
• B) Unfavourable variances (after closing to cost of goods sold) cause cost of goods sold to be higher.
• C) Unfavourable variances are recorded as a credit entry.
• D) Significant unfavourable variances should be investigated by managers.

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Definitions:

Equity Firm

A company that invests in businesses, typically by purchasing equity stakes, with the aim of earning returns through dividends or capital appreciation.

Shares Outstanding

The total number of shares of a company that are currently owned by shareholders, including both public investors and company officers or insiders.

Borrow

To receive something of value with the promise to return it or its equivalent value at a future date.

Unlevered Cost

The cost of funding a project without any debt, reflective of the project's risk as if financed entirely by equity.