For Each of the Following Costs, Classify Them as Either

question 74

Multiple Choice

For each of the following costs, classify them as either:
-Factory equipment depreciation

• A)Direct costs
• B)Indirect costs
• C)Neither direct nor indirect costs

---

Definitions:

Trade Credit

Short-term financing provided by suppliers, allowing buyers to purchase goods or services on account without immediate cash payment.

Compensating Balances

A requirement by some banks for companies to maintain a minimum balance in their account as part of a loan agreement, effectively reducing the amount of usable cash.

Management Policy

Guidelines and rules set by an organization's management to direct operations and decision-making in alignment with the company's objectives.

Credit Policy

A credit policy is a set of guidelines that a company follows to determine credit limits, payment terms, and how to manage delinquent accounts for its customers.