Which one of the statements below is correct concerning the comparison of differences between actual and planned results?
A)The difference must be reported on external financial statements.
B)The differences always require investigation.
C)It reflects information from the static budget.
D)It enables managers to take corrective action when differences are material.

Question

Quizplus · Accepted Answer

The comparison of actual and planned results enables managers to take corrective action when differences are material. This is because it helps managers identify where performance is falling short of expectations and make adjustments to get back on track. The other statements are not accurate. The difference does not necessarily need to be reported on external financial statements, and not all differences require investigation. Additionally, the comparison can reflect information from a flexible budget, not just a static budget.

Which One of the Statements Below Is Correct Concerning the Comparison