Which of the Following Is an Example of an External

question 44

Multiple Choice

Which of the following is an example of an external transaction cost?

• A) the cost of setting up a production unit
• B) the cost of searching for a contract manufacturer
• C) the cost of recruiting and retaining employees
• D) the cost of maintaining plant and machinery

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Definitions:

Net Income

The total profit or loss of a business after all expenses, taxes, and costs have been subtracted from total revenue.

Net Loss

A situation where total expenses exceed total revenues, indicating a negative profit.

Stockholder Dividends

Profit payouts made by a company to its investors.

Accounting Equation

The foundational equation in accounting stating that Assets = Liabilities + Equity, ensuring balance in a company's financial statements.