Respectively, Cash, Rent Expense, and Accounts Payable Are

question 117

Multiple Choice

Respectively, cash, rent expense, and accounts payable are:

• A) all permanent accounts.
• B) permanent, temporary, and temporary accounts.
• C) temporary, permanent, and temporary accounts.
• D) permanent, temporary, and permanent accounts.
• E) all temporary accounts.

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Definitions:

Period Cost

Expenses that are not tied directly to product production and are expensed in the period they are incurred.

Absorption Costing

A method of accounting which integrates all costs related to manufacturing, from direct materials and labor to variable and fixed overhead, into the product’s pricing.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overheads—in the cost of a product.

Variable Costing Income Statement

An income statement format that deducts only variable costs from sales to compute contribution margin, followed by the deduction of fixed costs to determine net income.