Examples of Classification of Expenses by Their Nature Are

question 62

Multiple Choice

Examples of classification of expenses by their nature are:

• A) employee expenses and distribution expenses.
• B) depreciation and marketing expenses.
• C) borrowing costs and distribution expenses.
• D) employee expenses and depreciation expenses.

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget and prices.

Substitution Effect

The substitution effect describes the change in consumption patterns due to a change in relative prices, leading consumers to substitute a product for a cheaper alternative.

Income Effect

The adjustment in demand for goods and services triggered by a change in consumers' discretionary income.

Income Increases

Situations where an individual's or household's earnings rise, potentially affecting their spending, saving, and investment behaviors.