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vagabundo [1.1K]
3 years ago
6

A traditional GAAP income statement does not help managers to predict the financial results of their decisions. Which of the fol

lowing is a reason for this shortcoming?
a. The GAAP statement is based on cost function rather than cost behavior.
b. The GAAP statement is based on classification rather than function.
c. The GAAP statement is based on cost behavior rather than cost function.
d. The GAAP statement is based on function rather than classification.
Business
1 answer:
Amiraneli [1.4K]3 years ago
7 0

Answer:

A) The GAAP statement is based on cost function rather than cost behavior.

Explanation:

Income statements that follow GAAP rules categorizes expenses based on their business function: product, selling or administrative.

While cost behavior categorizes costs based on how they influence a company's activities: variable, fixed and mixed. When a manager wants to measure the impact of any decision he/she makes, they need to use this type of categorization. For example, if fixed costs increase, what is the new break even point? If variable costs decrease, how is the marginal cost affected?

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Match each of the numbered descriptions with the term or phrase it best reflects. Indicate your answer by writing theletter for
Temka [501]

Please the remaining part of the question below :

1.Amount a business earns after paying all expenses and costs associated with its sales and revenues.

2.An examination of an organization’s accounting system and records that adds credibility to financial statements.

3.Principles that determine whether an action is right or wrong.

4.Accounting professionals who provide services to many clients.

5.An accounting area that includes planning future transactions to minimize taxes paid.

Answer:

1.Amount a business earns after paying all expenses and costs associated with its sales and revenues. - Net income (G)

2.An examination of an organization’s accounting system and records that adds credibility to financial statements. - Audit (A)

3.Principles that determine whether an action is right or wrong. - Ethics (C)

4.Accounting professionals who provide services to many clients.- Public accountants (F)

5.An accounting area that includes planning future transactions to minimize taxes paid- Tax accounting (D)

Explanation:

6 0
3 years ago
Cameron has applied for a loan to expand his young business. When bankers look for evidence of whether he will be able to repay
Readme [11.4K]

Answer:

what Cameron's firm has done in the past.

Explanation:

Small businesses do request for loans in some cases when they aim at using borrowed funds as capital to become more profitable in their business. When such requests are made, the bank can decide to look at what has been done in the past by the firm to ascertain if they can be able to repay the loan. They usually look at the current and past loans (If any) and debts that have been incurred by the business. In some cases, they also examine the bank accounts the business won and their tax IDs, etc.  

3 0
3 years ago
At the time of Mary Kay’s expansion into the Indian market, the average income in Delhi was $1,420 and in Mumbai it was $2,850 (
Ksju [112]

Answer:

Economic forces.

Explanation:

External trends and events significantly affect all products, services, markets and organization in the world.

External forces can be divided into five broad categories.

-Economic forces.

-Social, cultural, demographic and environmental forces.

-Political, governmental, and legal forces.

-Technological forces.

-Competitive forces.

The economic forces have a direct impact on the potencial attractiveness of various strategies. For example, if interest rates rice, the found needed for capital expansion become more costly or unavailable.

7 0
3 years ago
Creative Camera Co. sold equipment with a cost of $ 18 comma 000 and accumulated depreciation of $ 9 comma 000 for an amount tha
umka2103 [35]

Answer:

d. Some other amount - $11,000

Explanation:

Investing activities: It records those activities which include purchase and sale of the long term assets . The purchase of long term assets is an outflow of cash and the sale of long term assets is an inflow of cash

The computation of the sale of plant assets is shown below:

= Sale value  of equipment - accumulated depreciation + gain on sale of equipment

= $18,000 - $9,000 + $2,000

= $11,000

4 0
3 years ago
The citrus growers who collect mature oranges from the grove would be considered what in the value chain
slava [35]

Answer:

Inbound logistics.

Explanation:

Value chain is the process in business which adds value to the product. The activities in value chain involves the manufacturing till the after sales service. The value chain activities are, Inbound logistics, operations, outbound logistics, marketing and sales, after sales. The process of collecting mature oranges is considered as inbound logistics in value chain.

7 0
3 years ago
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