Which of the Following Observations Is True

question 168

Multiple Choice

Which of the following observations is true?

• A)TFC remains the same irrespective of units of output produced.
• B)TVC remains the same irrespective of units of output produced.
• C)TVC falls as the unit of output increases.
• D)AFC increases as output increases further and further.

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Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, or obsolescence.

Accrued Revenues

Revenues earned in an accounting period that have not yet been received in cash or recorded at the statement date.

Unearned Rent

Income received for rent before the rental period has occurred, classified as a liability until the services (rental period) are performed.

Accrued Salaries

Salaries that have been earned by employees but have not yet been paid by the employer, recognized as a liability on the balance sheet.