The Purchase of Stock with Cash in the Hope of Earning

question 76

Multiple Choice

The purchase of stock with cash in the hope of earning a capital gain is known as taking a

• A) long position in the stock.
• B) short position in the stock.
• C) long, margined position in the stock.
• D) short, margined position in the stock.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor used in creating the product.

Work in Process Inventory

Goods in various stages of production but not yet completed, representing one of the components of a manufacturing company's inventory.

Factory Overhead

All the indirect costs associated with the manufacturing process that cannot be directly tied to a specific product, including costs related to the factory itself such as utilities, depreciation, and maintenance.

Direct Labor Costs

Expenses that are directly associated with the manufacturing of a product or the delivery of a service, such as wages of workers on the production line.