Fixed Costs That May Be Avoided in the Future Are

question 212

Multiple Choice

Fixed costs that may be avoided in the future are referred to as

• A)relevant costs.
• B)opportunity costs.
• C)replacement costs.
• D)sunk costs.

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Definitions:

Cash

Money in the form of currency, which includes bills and coins, used as a medium of exchange.

Supplies

Items that are consumed during the operation of a business, such as office supplies, which are essential for day-to-day activities but not directly tied to the product being sold.

Accounts Payable

A liability account that records amounts a company owes to suppliers for goods or services purchased on credit.

Withdrawals

Amounts of money taken out from a business by its owner(s) for personal use, not considered business expenses.