Costs That Are Incurred to Preclude Defects and Improper Processing

question 49

Multiple Choice

Costs that are incurred to preclude defects and improper processing are:

• A)prevention costs
• B)detection costs
• C)appraisal costs
• D)failure costs

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Definitions:

Settlement

The conclusion of a transaction or the resolution of a claim or dispute, usually involving the transfer of funds or assets.

Clean-Up Provision

A clause in a financial contract that requires the borrower to pay off a loan or line of credit in full after a specified period or under certain conditions, to ensure the credit line is periodically brought to a zero balance.

AASB 137

An Australian accounting standard that deals with the accounting for provisions, contingent liabilities, and contingent assets.

Long-Term Project

A project that spans over an extended time period, typically beyond one year, often involving substantial investment or complexity.