Answer the following statements true (T) or false (F)
1. There are only two methods to derive an estimated line of cost behavior; the high-low
method and the scatter diagram.
2. Scatter diagrams plot volume (units) on the vertical axis and cost on the horizontal axis.
3. Scatter diagrams plot volume (units) on the horizontal axis and cost on the vertical axis.
4. To determine the slope of the variable cost from a scatter diagram, divide the change in units by the change in cost.
5. To determine the slope of the variable cost from a scatter diagram, divide the change in cost by the change in units.
1. FALSE
2. FALSE
3. TRUE
4. FALSE
5. TRUE
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Bad debts are considered as an expense of selling on credit
Indicate whether the statement is true or false
Which of the following best defines the term distributional interest?
A) the ratio in which profit is distributed among members of an LLC (limited liability company) B) the process of distributing profits or losses according to the capital investment of the member with the interest C) the constitution of management of an LLC based on the extent of each member's financial investment D) a member's ownership interest in an LLC that entitles the member to receive distributions of money and property from the LLC
Judge Julia decides that the precedent for the case she is hearing is no longer correct due to technological changes. She overturns the precedent when she decides the case. It is most likely that her case will
a. go unnoticed by the public. b. be thrown out of court. c. receive a great deal of publicity. d. be ignored by the media.
Dividend changes may be used by management as a credible communication tool to signal
investors about future earnings under which of the following dividend policy theories? A) the expectations theory B) the information effect C) the residual dividend theory D) the clientele effect