Long-Term Investments

question 42

Multiple Choice

Long-term investments:

• A)Are current assets.
• B)Can include funds designated for a special purpose,or investments in land not used in the company's operations.
• C)Must be readily convertible to cash.
• D)Are expected to be converted into cash within one year.
• E)Include only equity securities.

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Definitions:

Normal Capacity

The average production or operating levels that a company can sustain under normal circumstances over a period.

Direct Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, multiplied by the actual quantity purchased.

Units

A measure of quantity used to quantify the products, services, or resources dealt with in business operations.

Direct Labor Time Variance

The difference between the actual hours and the standard hours of direct labor spent producing a product multiplied by the standard direct labor rate per hour.