The Following Costs Are Relevant to the Decision Situation Cited

question 57

Multiple Choice

The following costs are relevant to the decision situation cited except:

• A)the cost of hiring a full-time staff attorney, in a decision to establish an in-house legal department or retain the services of a prominent law firm.
• B)the remodeling cost of existing office space, in a firm's decision to stay at its current location or move to a new building.
• C)the long-term salary costs demanded by Dany Heatley (a superstar) and Brendan Bell (an average player) in hockey contract negotiations, in a decision that determines the amounts by which ticket prices must be raised.
• D)the cost to enhance West Jet's Web site, in a decision to expand existing service to either Moosonee or Fort Albany
• E)the commissions that could be earned by a salesperson, in a decision that involves salesperson compensation methods (i.e., commissions or flat monthly salaries).

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Definitions:

Credit Side

The right side of an accounting entry, indicating increases in liabilities, revenues, and equity, and decreases in assets and expenses.

Normal Balance

The side (debit or credit) on which increases to an account are recorded, depending on the type of account.

Liability Account

An accounting record that represents a company's legal debts or obligations that arise during the course of business operations.

Revenue Account

An account that tracks the income generated from a company's primary operations.