A Merchandising Company Typically Will Have a High Proportion of Which

question 84

Multiple Choice

A merchandising company typically will have a high proportion of which type of cost in its cost structure?

• A) Variable.
• B) Fixed.
• C) Mixed.
• D) Step-variable.

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Definitions:

Accounts Payable

Short-term liabilities a company owes to its creditors or suppliers, expected to be settled within one year.

Bank Loan

A sum of money borrowed from a bank that needs to be repaid with interest.

Accrual

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Spontaneous Financing

Financing that arises naturally from the normal operations of a company, such as trade credit that increases automatically with increases in sales.