Which Types of Quality Costs Are Incurred in the Course

question 119

Multiple Choice

Which types of quality costs are incurred in the course of inspecting, identifying, and isolating defective products and services before they reach the customer?

• A) Appraisal (detection) costs
• B) Prevention costs
• C) External failure costs
• D) Internal failure costs

---

Definitions:

Tax Credit

An amount that taxpayers can subtract directly from taxes owed to the government.

Municipal Bonds

Bonds issued by local governments or their agencies, which are often used to fund public projects like schools, highways, and water systems, and may offer tax-exempt interest to investors.

Foreign Taxes Paid

This represents taxes paid to foreign governments on income earned outside of the taxpayer’s country of residence, often creditable against domestic taxes in the taxpayer’s home country to avoid double taxation.

Deferred Tax Liability

An accounting term that refers to a tax due in the future for income that has already been recognized in the financial statements.