Which of the Following Is an Example of a Discretionary

question 22

Multiple Choice

Which of the following is an example of a discretionary fixed expense?

• A)direct labour
• B)depreciation on a factory building
• C)insurance on a building
• D)property taxes on a factory building

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Definitions:

Cost Or Market

An accounting method used to value inventory or securities at the lower of either its original cost or its market value as of the reporting date.

LIFO Reserve

The difference between the cost of inventory calculated under the Last In, First Out method and the FIFO (First In, First Out) method.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations, calculated as current assets divided by current liabilities.

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or the business's operating cycle, whichever is longer.