Scott Is Managing a Company and He Has Been Advised

question 293

Multiple Choice

Scott is managing a company and he has been advised by his financial manager that his largest source of short-term debt is too high. What source of funding is Scott's financial manager probably talking about?

• A) Inventory loans
• B) Bank notes
• C) Credit cards
• D) Commercial paper
• E) Accounts payable

Understand the process and purpose of posting transactions from journals to ledgers.

Distinguish between the effects of debits and credits on different types of accounts.

Appreciate the significance of maintaining congruency between journal and ledger account titles.

Apply understanding of accounting principles to categorize transactions correctly.

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Definitions:

Activity Rate

In cost accounting, it's the cost driver rate used in activity-based costing to assign indirect costs to products or services based on each activity's frequency and intensity.

Manufacturing Overhead

All manufacturing costs that cannot be directly traced to individual units produced, such as electricity, maintenance, and factory management salaries.

Activity-Based Costing

A method of accounting that assigns costs to products or services based on the activities required to produce them, aimed at providing more accurate costs.

Overhead Cost

The ongoing expenses of operating a business that are not directly attributable to a specific product or service, including rent, utilities, and administrative expenses.