Which of the Following Is an Example of a Fixed

question 30

Multiple Choice

Which of the following is an example of a fixed cost for a fishing company?

• A) The cost of hiring a fishing crew.
• B) The fuel costs of running the boat.
• C) The monthly loan payment on the boat.
• D) The supply of nets, hooks, and fishing lines.

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Definitions:

Note Receivable

A written promise for amounts to be received, typically including interest, by one party from another.

Liability

An obligation or debt that arises during the course of business operations, which the company is responsible to repay.

Equipment Purchase

The acquisition of physical assets, such as machinery or tools, that are used in the operations or production processes of a business.

Interest Expense

The cost incurred by an entity for borrowed funds, often expressed as an annual percentage of the principal.