All of the Following Are Costs of Credit EXCEPT

question 46

Multiple Choice

All of the following are costs of credit EXCEPT

• A) bad debt losses.
• B) credit analysis expenses.
• C) lost revenues when customers do not take advantage of trade discounts.
• D) the increased investment in accounts receivable.

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Definitions:

Process Costing

A costing method used in production where costs are assigned to processes and then averaged over all units produced.

Job-Order Costing

An accounting method that assigns costs to specific jobs or batches, used in industries where goods or services are produced on a custom basis.

Process Costing

An accounting methodology that traces and accumulates direct costs, and allocates indirect costs, of a manufacturing process. Costs are assigned to products, usually in a large batch, which might include an entire month's production.

Job-Order Costing

A costing method used in manufacturing, where costs are assigned to specific jobs or batches, ideal for customized orders.