Every Item of Proposed Expense Can Be Classified as Either

question 26

Multiple Choice

Every item of proposed expense can be classified as either direct cost or an indirect cost. Which of the following is NOT an example of direct costs?

• A) Salaries and wages of staff who work for only one program
• B) Materials and supplies used exclusively in one program
• C) Equipment used exclusively in one program
• D) The cost of custodial work for the building

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Definitions:

Market Interest Rate

The current rate of interest available in the market that borrowers must pay to obtain funds.

Carrying Value

The book value of assets and liabilities on a company’s balance sheet, often different from the market value.

Discount On Bonds

The difference between the face value of a bond and its selling price, when the bond is sold for less than its face value.

Premium

The amount paid in excess of a standard cost or the face value of a financial instrument, often associated with insurance policies, bonds, and options.