One Aspect of Financial Planning Is to Make Wise Decisions

question 93

Multiple Choice

One aspect of financial planning is to make wise decisions using a plan as to what to purchase and when to purchase it.Which component of financial planning does this deal with?

• A)Borrowing
• B)Spending
• C)Managing risk
• D)Investing
• E)Retirement and estate planning

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Definitions:

Inventories

Items such as raw materials, work-in-progress, and finished goods that a company holds for sale in the ordinary course of business.

Net Operating Income

The total profit of a company after operating expenses are subtracted from total revenue but before deducting taxes and interest.

Absorption

The process in cost accounting of allocating all manufacturing costs, both fixed and variable, to individual units of production.

Variable Costing

A costing method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, used for internal decision-making processes.