All EXCEPT which of the following statements about ABC analysis are true?
A) In ABC analysis, inventory may be categorized by measures other than dollar volume.
B) ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume.
C) ABC analysis is an application of the Pareto principle.
D) ABC analysis suggests that all items require the same high degree of control.
E) ABC analysis suggests that there are the critical few and the trivial many inventory items.
D
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Income tax was $175,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end ofthe year, respectively. Cash payments for income tax reported on the statement of cash flows using the directmethod is
a. $175,000 b. $165,000 c. $205,000 d. $215,000
If the total materials variance (actual cost of materials used compared with the standard cost of the standard amount of materials required) for a given operation is favorable, why must this variance be further evaluated as to price and usage?
a. There is no need to further evaluate the total materials variance if it is favorable. b. Generally accepted accounting principles require that all variances be analyzed in three stages. c. All variances must appear in the annual report to equity owners for proper disclosure. d. It is done so that management can evaluate the efficiency of the purchasing and production functions.
A firm's AFN must come from external sources. Typical sources include short-term bank loans, long-term bonds, preferred stock, and common stock.
Answer the following statement true (T) or false (F)
Revenues are:
a. cash payments from customers. b. outflows of assets to customers. c. cash receipts from customers. d. inflows of assets from customers. e. sensitive to the timing of cash receipts from customers.