White Planet Electronics Is a Company That Sells the Various

question 101

Multiple Choice

White Planet Electronics is a company that sells the various inventories required by other companies to manufacture electronic gadgets. It spends $500 every month on a storage facility that manages and stores the parts. In this scenario, the money spent by White Planet Electronics toward the storage facility for the protection of the company's goods is called _____.

• A) ordering cost
• B) setup cost
• C) holding cost
• D) stockout cost

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Definitions:

Owner's Equity Statement

A financial statement showing the changes in the equity of a business entity over a period of time.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.

Monetary Unit Assumption

An accounting principle that assumes transactions and events can be expressed in monetary units.