In Making a Decision to Drop a Product Line, Variable

question 135

Multiple Choice

In making a decision to drop a product line, variable costs are:

• A) Avoidable
• B) Never relevant
• C) Allocated
• D) Usually sunk

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Definitions:

Journal Entry

A record in accounting that notes the details of a financial transaction in terms of debits and credits to the accounts.

Discount on Bonds Payable

The difference between the face value of a bond and its selling price when the bond is sold for less than its face value.

Bonds Payable

Long-term liabilities represented by promissory notes issued by a company to raise capital, to be repaid at a future date.

Installment Note

A debt instrument that requires the borrower to make regular payments (installments) of principal and interest over a set period until the total debt is paid.