What Is the Accounting Term That Describes an Amount Paid

question 19

Multiple Choice

What is the accounting term that describes an amount paid for an existing business above the value of its other assets?

• A) A patent
• B) A copyright
• C) Goodwill
• D) A franchise fee
• E) Reputation

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Definitions:

Fixed Cost Per Unit

A financial metric that represents the total fixed costs divided by the number of units produced. It decreases as production increases.

Variable Cost

A cost that varies in direct proportion to changes in the level of production or sales volume.

Cost Driver

A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.

Indirect Materials

Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.