Prepaid Expenses Are Also Called

question 147

Multiple Choice

Prepaid expenses are also called:

• A)accrued expenses.
• B)deferred expenses.
• C)both A and B.
• D)neither A or B.

---

Definitions:

Markup Percentage

A measure of how much the price of a product or service is increased over its cost to the seller, expressed as a percentage of the cost.

Variable Product Cost

Expenses that fluctuate in direct proportion to the amount of output produced, including direct labor and raw materials.

Fixed Costs

Expenses that do not change with the level of production or sales, including rent, salaries, and insurance, providing contrast to variable costs.

Operating Income

Earnings before interest and taxes (EBIT), calculated as gross income minus operating expenses, excluding non-operating income and expenses.