All of the Following Are Likely to Increase the Cost

question 91

Multiple Choice

All of the following are likely to increase the cost of a company's short-term financing EXCEPT

• A) an increase in the bank's prime lending rate.
• B) an increase in the compensating balance required.
• C) taking a loan on a discount basis.
• D) an increase in the company's debt rating by Moody's or Standard and Poors.

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Definitions:

Budget Performance Report

A report that summarizes actual costs, standard costs, and the differences for the units produced.

Cost Centers

Parts of an organization to which costs can be allocated, but which do not directly generate revenues.

Operating Expenses

Costs incurred during the normal functioning of a business, excluding the cost of goods sold.

Support Departments

Units within an organization that provide essential services to other departments or divisions but do not directly produce revenue.