If a Business Decided to Classify Its Expenses Under the Headings

question 17

Multiple Choice

If a business decided to classify its expenses under the headings 'Selling and Distribution,' 'General and Administrative' and 'Financial,' into which groupings would 1. depreciation of sales staff's motor vehicles and 2. bad debts written off, fall?

• A)1. general and administrative; 2. financial.
• B)1. selling and distribution; 2. financial.
• C)1. financial; 2. selling and distribution.
• D)1. selling and distribution; 2. general and administrative.

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Definitions:

Verbal Agreement

An oral contract that is formed through spoken communication rather than in writing, though its legal enforceability varies by jurisdiction.

Guarantee

A collateral promise (in writing) to answer for the debt of another (the principal debtor) if the debtor should default in payment.

Demand for Payment

A formal request issued by a creditor to a debtor requiring payment of an outstanding debt by a specific date.

Guarantee

A formal assurance or promise, typically in writing, that certain conditions will be fulfilled, including the quality and durability of a product or service.