Debts That Are to Be Repaid in Two Years Are

question 63

Multiple Choice

Debts that are to be repaid in two years are referred to as

• A) expenses.
• B) current assets.
• C) long-term liabilities.
• D) fixed assets.
• E) current liabilities.

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Definitions:

Fixed Costs

Overheads that are unaffected by the quantity of output or sales, for example, tenancy costs, wages for staff, and indemnity expenses.

Contribution Format

A type of income statement presentation that separates fixed and variable costs, allowing for an easier assessment of how changes in volume affect profitability.

Contribution Format

A way of presenting income statements where variable costs are deducted from sales to find the contribution margin, then fixed costs are deducted to find net operating income.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.