Which of the following statements is true regarding the traceability of direct costs?
A) Source documents can be used to link a resource to a specific cost object.
B) The accuracy of the costs of the cost object are increased by the more costs that can be directly traced.
C) Entities should only commit resources to trace costs if such costs are deemed important or the cost of tracking is minimal.
D) All of the statements are true.

Question

Quizplus · Accepted Answer

All of the statements are true. Source documents can be used to directly link a resource to a specific cost object, and the accuracy of the costs of the cost object are increased by the more costs that can be directly traced. However, entities should also consider the importance of tracing costs and the cost of tracking before committing resources to do so.

Which of the Following Statements Is True Regarding the Traceability