A Cost That Has Been Incurred in the Past, Cannot

question 103

Multiple Choice

A cost that has been incurred in the past, cannot be recouped, and is not relevant to future decisions is termed a

• A)period cost
• B)differential cost
• C)sunk cost
• D)replacement cost

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Definitions:

Preferred Stock Dividend

Dividends that are paid out to preferred shareholders, typically at a fixed rate, before any dividends are issued to common shareholders.

Taxable Income

The amount of income that is subject to taxes, after all deductions and exemptions.

Operating Expense

Expenses incurred during the course of regular business operations, such as wages, rent, and utilities, that are not directly tied to the production of goods or services.

Brokerage Commissions

Brokerage Commissions are fees charged by a broker to execute transactions or provide specialized services.