Which of the Following Is an Example of a Cost

question 174

Multiple Choice

Which of the following is an example of a cost item that should be classified as a prevention cost?

• A)Maintenance of manufacturing machinery
• B)Quality control checks
• C)Rework costs
• D)Warranty costs

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Definitions:

Cash Dividend

A payout from a company's profits, determined by the board of directors, given to a group of its stockholders as cash.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.

Board of Directors

A group of individuals elected to represent shareholders and govern the corporation's affairs, making key decisions on its behalf.

Prior Period Adjustment

A correction of errors in previously issued financial statements to reflect accurate past financial information.