Buying Assets Needed to Operate a Business Is an Example

question 44

Multiple Choice

Buying assets needed to operate a business is an example of a(n)

• A)purchasing activity.
• B)financing activity.
• C)investing activity.
• D)operating activity.

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Definitions:

Break-Even Sales

The level of sales at which total revenues equal total costs, resulting in neither profit nor loss for the business.

Common Fixed Expenses

Common fixed expenses are costs that do not fluctuate with the volume of production or sales, shared by different segments or products of a business, like rent and insurance.

Operating Period

The span of time during which a company or a project is expected to operate or carry out its activities.

Break-Even Sales

The amount of revenue required to cover all fixed and variable costs, resulting in a net income of zero.