Leverage Is the Amount of ________ on a Firm's Balance

question 90

Multiple Choice

Leverage is the amount of ________ on a firm's balance sheet.

• A)equity
• B)debt
• C)preferred stock
• D)none of the above

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Net Income

The amount of revenue left over after all expenses and taxes have been deducted.

Variable Costing

Variable costing is an accounting method in which only variable production costs (direct materials, direct labor, and variable manufacturing overhead) are included in the cost of goods sold, with fixed overhead expenses treated as period costs.

Variable Overhead

The overhead costs that fluctuate with the level of production activity, such as utilities and materials used in production.