Compensating errors cancel each other's effect on trial balance totals, so the trial balance still agrees. Errors of casting, posting one side, wrong totaling will cause disagreement.
Explanation:
Unlike a static budget, a flexible budget adjusts based on the actual activity level, providing a realistic benchmark for variance analysis.
A: The Going Concern concept justifies the charging of depreciation. R: Depreciation allocates the cost of an asset over its useful life. Choose the correct option.
A.A is true but R is false
B.Both A and R are true but R is NOT the correct explanation of A
C.Both A and R are true and R is the correct explanation of A
Explanation:
The Going Concern concept assumes the business will continue indefinitely, which justifies capitalizing asset costs and depreciating them over their useful lives. R correctly explains the mechanism of depreciation.
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