The Payments You Make on Your Automobile Loan Are Given

question 194

Multiple Choice

The payments you make on your automobile loan are given in terms of dollars.As prices rise you notice you give up fewer goods to make your payments.

• A)The dollar amount you pay is a nominal value.The number of goods you give up is a real value.
• B)The dollar amount you pay is a real value.The number of goods you give up is a nominal value.
• C)Both the dollar amount you pay and the goods you give up are nominal values.
• D)Both the dollar amount you pay and the goods you give up are real values.

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Definitions:

Cost Per Equivalent Units

A method used in process costing that calculates the cost assigned to units produced during a period, considering partially completed units as fractions of whole units.

Weighted Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory balance using a weighted average of the costs of all items available for sale during the period.

FIFO Costing

An inventory valuation method that assumes that the first items placed in inventory are the first ones sold, standing for First In, First Out.

Unit Costs

The cost incurred by a company to produce, store, and sell one unit of a particular product or service.