Which of the Following Would Not Be Characterized as a Cost

question 105

Multiple Choice

Which of the following would not be characterized as a cost object?

• A) An vehicle manufactured by an automobile manufacturer.
• B) A large city's fire department.
• C) A fast food restaurant located in a Midwest town.
• D) A regional airline flight from Atlanta to Miami.
• E) All of these are examples of cost objects.

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Definitions:

Capital Lease

A lease agreement that is considered a purchase of an asset for accounting purposes, because it transfers substantially all the risks and rewards of ownership.

Bargain Purchase Price

A price for an asset that is significantly below its fair market value.

CRA

Credit Risk Analysis, assessing the risk of default on a loan by evaluating the potential borrower's creditworthiness, or it could stand for Canada Revenue Agency, the federal agency responsible for tax laws for the Canadian government.

Operating Lease

A lease agreement allowing the use of an asset without ownership, typically with shorter terms than capital leases.