ACCT 102 STUDY GUIDE QUESTIONS
WITH 100% CORRECT ANSWERS
Which of the following is not a possible alternate term for costs that can be eliminated
by taking a specified course of action?
A. avoidable costs
B. differential costs
C. relevant costs
D. sunk costs - Answer- D. sunk costs
For purposes of decision making, avoidable costs are costs that
A. were incurred in the past.
B. will be incurred in the future and can be changed.
C. do not differ between alternatives.
D. none of these. - Answer- B. will be incurred in the future and can be changed.
Relevant costs are often referred to as
A. unavoidable costs
B. avoidable costs
C. sunk costs
D. all of these - Answer- B. avoidable costs
Select the correct statement regarding relevant costs and revenues.
A. To be relevant, a cost or revenue must be future-oriented and must differ between
the alternatives.
B. Sunk costs are relevant for decision-making purposes.
C. Differential revenues are expected future revenues that do not vary between the
alternatives under consideration.
D. Avoidable costs are also known as sunk costs. - Answer- A. To be relevant, a cost
or revenue must be future-oriented and must differ between the alternatives.
Select the incorrect statement regarding sunk costs
A. Sunk costs cannot be avoided. B. Sunk costs are relevant if they differ between the
alternatives.
C. Sunk costs are costs that have been incurred in past transactions.
D. Sunk costs include historical costs such as equipment acquisition costs. - Answer- B.
Sunk costs are relevant if they differ between the alternatives.
WITH 100% CORRECT ANSWERS
Which of the following is not a possible alternate term for costs that can be eliminated
by taking a specified course of action?
A. avoidable costs
B. differential costs
C. relevant costs
D. sunk costs - Answer- D. sunk costs
For purposes of decision making, avoidable costs are costs that
A. were incurred in the past.
B. will be incurred in the future and can be changed.
C. do not differ between alternatives.
D. none of these. - Answer- B. will be incurred in the future and can be changed.
Relevant costs are often referred to as
A. unavoidable costs
B. avoidable costs
C. sunk costs
D. all of these - Answer- B. avoidable costs
Select the correct statement regarding relevant costs and revenues.
A. To be relevant, a cost or revenue must be future-oriented and must differ between
the alternatives.
B. Sunk costs are relevant for decision-making purposes.
C. Differential revenues are expected future revenues that do not vary between the
alternatives under consideration.
D. Avoidable costs are also known as sunk costs. - Answer- A. To be relevant, a cost
or revenue must be future-oriented and must differ between the alternatives.
Select the incorrect statement regarding sunk costs
A. Sunk costs cannot be avoided. B. Sunk costs are relevant if they differ between the
alternatives.
C. Sunk costs are costs that have been incurred in past transactions.
D. Sunk costs include historical costs such as equipment acquisition costs. - Answer- B.
Sunk costs are relevant if they differ between the alternatives.
