Precautionary Saving Is Saving

question 84

Multiple Choice

Precautionary saving is saving

• A) to meet long-term objectives,such as retirement,college attendance,or the purchase of a home.
• B) for protection against unexpected setbacks,such as the loss of a job.
• C) for the purpose of leaving an inheritance.
• D) to smooth income over one's lifetime.
• E) done in anticipation of sales or bargain in the futurE.

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Definitions:

Direct Labor Cost

The expense of labor that can be directly attributed to the production of goods or services.

Net Operating Income

A company's revenue minus its operational direct and indirect costs, excluding taxes and interest.

Net Operating Income

Earnings from a company's regular activities before taxes and interest, used to gauge the company's operational efficiency.

Absorption Costing

Absorption costing is an accounting method that includes both variable and fixed manufacturing costs in the cost of a product.