Which of the Following Costs Probably Should Not Be Allocated

question 108

Multiple Choice

Which of the following costs probably should not be allocated to the investment needed for a new project?

• A)Increase in accounts receivable
• B)New warehouse, built for this project
• C)25 percent of the vice president's salary
• D)Labour expense for employees in new warehouse

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle, whichever is longer.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities; essentially the net worth of a company.

Note Payable

A written promise to pay a specific amount of money, usually with interest, by a certain date.