Which of the Following Helps Explain Why Depositors Sometimes Put

question 78

Multiple Choice

Which of the following helps explain why depositors sometimes put their funds in demand deposits rather than NOW accounts?

• A)Demand deposits pay interest, whereas NOW accounts do not pay interest.
• B)Businesses may not hold NOW accounts.
• C)Checks may be written against demand deposits, but not against NOW accounts.
• D)Demand deposits are more liquid than NOW accounts.

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Definitions:

High-low Method

A technique used in accounting and finance to estimate fixed and variable costs based on the highest and lowest levels of activity.

Variable Electrical Costs

Costs associated with electricity that vary depending on the amount of usage or consumption over a period.

High-low Method

A technique in cost accounting used to determine the variable and fixed components of a company's costs by analyzing the highest and lowest levels of activity.

Machine Hour

A measure of the amount of time a machine is operated, used in cost accounting to allocate costs to products based on machine usage times.