Patrick Is in the Habit of Using His Credit Card

question 59

Multiple Choice

Patrick is in the habit of using his credit card for expenditures made on business trips. The most likely reason he does this is to

• A) lower his business expenses.
• B) take a deduction on the interest he pays on his credit card balance.
• C) pad his expense account.
• D) keep track of his purchases.

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Definitions:

Fixed Costs

Costs that do not fluctuate with the volume of production or sales, such as rent, salaries, or insurance premiums.

Janitorial Costs

Expenses associated with cleaning and maintaining a company's premises, including wages for janitorial staff and cleaning supplies.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

Unit Variable Cost

The cost associated with producing one additional unit of a product, including materials, labor, and other variable expenses.