Final answer:
Trigger words for variance analysis in a case often involve sentences that necessitate analytic reasoning including cause-and-effect, explanations, illustrations, or evidence of a claim. These elements are essential to identify and address discrepancies between expected and actual financial performance.
Step-by-step explanation:
Understanding Trigger Words in Variance Analysis
When examining a case for variance analysis, look for trigger words or sentences that indicate a need to delve deeper into budgetary or financial performance discrepancies. These linguistic cues might include:
- a reason for the topic sentence's claim;
- an illustration of the topic sentence's point;
- an explanation of the sentence's point; or
- evidence demonstrating the topic sentence's point.
Variance analysis is a tool, often used in managerial accounting, to assess the differences between planned and actual performance. This can involve assessing the measurement variability, natural variability, induced variability, or sampling variability. It can also include what-if-then statements, cause-and-effect reasoning, and assessing the reasonableness of an answer to establish its validity.
If the analysis suggests that the answers are not reasonable, it may require revising the underlying assumptions or the topic sentence itself. The aim is to improve clarity and financial reporting accuracy to make informed decisions.