Which Statement Is True

question 2

Multiple Choice

Which statement is true?

• A)All variable costs are direct costs.
• B)Because of a cost-benefit tradeoff, some direct costs may be treated as indirect costs.
• C)All fixed costs are indirect costs.
• D)All direct costs are variable costs.

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Definitions:

Partnership Accounting

The process of managing and recording the financial activities, transactions, and interests of partners within a business partnership.

Drawing Account

An account that tracks the money or goods withdrawn from a business by its owners for personal use.

Capital Account

A financial statement that shows the changes in ownership interest of a company over a period.

Noncumulative

Pertains to dividends or other rights that do not accumulate if not paid or exercised in the period they are due.