An Open Account Means

question 5

Multiple Choice

An open account means:

• A) multiple payments are made on a regular schedule
• B) minimum monthly payments are made on an account balance
• C) half payment is due when the invoice is received
• D) the borrower may borrow up to the full amount of the credit limit
• E) none of the other choices

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Definitions:

Variable Costs

Expenses that fluctuate with the level of production or sales volume, such as raw materials and direct labor.

Direct Costs

Expenses that can be directly traced to the production of a specific good or service, such as raw materials and direct labor.

Cost Object

Anything for which a separate measurement of costs is desired, such as products, services, or projects.

Economically Traced

The assignment of costs to a specific product or service based on the direct relationship between the cost and the object.