Costs Incurred When Products and Services Fail to Conform to Requirements

question 23

Multiple Choice

Costs incurred when products and services fail to conform to requirements or satisfy customer needs after being delivered to customers are

• A) prevention costs.
• B) appraisal costs.
• C) internal failure costs.
• D) external failure costs.
• E) a different category of quality-related costs.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members. It's often quoted as the amount each share receives (dividends per share).

Unearned Rent

Income received for rent before the rental period has occurred, recorded as a liability until the period passes.

Adjusted Trial Balance

A listing of all the accounts and their balances after adjustments have been made, used to prepare financial statements.

Retained Earnings

The portion of net income that is kept by a company to reinvest in its core business or to pay debt, rather than being distributed to shareholders as dividends.