Costs Incurred Before the Split-Off Point Are

question 43

Multiple Choice

Costs incurred before the split-off point are

• A) sunk costs.
• B) incremental costs.
• C) relevant costs.
• D) opportunity costs.

---

Definitions:

Perpetual Inventory

An inventory management system where updates are made continuously to record sales and purchases, providing a real-time view of inventory levels.

Purchase Price

The amount of money paid or agreed to be paid by the buyer to acquire an asset, product, or service from a seller.

Purchase Discounts

Purchase discounts are reductions in price given by the supplier to the buyer for early payment or payment within a specified period.

Credit Sales

Transactions where the customer purchases goods or services on credit and pays the seller at a later date.