When Making Decisions, It Is Best to Use

question 43

Multiple Choice

When making decisions, it is best to use

• A)average costs.
• B)fixed costs that would be incurred.
• C)unit cost, rather than total cost.
• D)variable costs that would be incurred.
• E)relevant costs.

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand within a business for minor, day-to-day expenses.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Highly Liquid Investments

Investments that can be quickly converted into cash without a significant loss in value.

Specific Amount

A precise quantity or financial figure identified within a transaction or financial statement, not generalized or estimated.