Which of the Following Statements Is True of the Behavior

question 229

Multiple Choice

Which of the following statements is true of the behavior of total fixed costs,within the relevant range?

• A) They will remain the same as production levels change.
• B) They will increase as production decreases.
• C) They will decrease as production decreases.
• D) They will decrease as production increases.

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Definitions:

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future.

Depreciation Expense

The allocated cost of an asset over its useful life, representing wear and tear, decay, or decline in value.

Note Receivable

A financial asset representing a written promise to receive a certain amount of money at a future date.