One Factor Contributing to the Rapid Growth of the Commercial

question 52

Multiple Choice

One factor contributing to the rapid growth of the commercial paper market since 1970 is

• A)the fact that commercial paper has no default risk.
• B)improved information technology making it easier to screen credit risks.
• C)government regulation.
• D)FDIC insurance for commercial paper.

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Definitions:

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs.

Net Incomes

The total earnings of a company after all expenses and taxes have been deducted from revenues, indicating profitability over a specific period.

Variable Costing

An accounting method that includes only variable production costs (costs that change with the level of output) in the cost of manufactured goods.

Absorption Costing

Absorption costing is a method of inventory costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.