What Type of Transaction Would Not Initially Be Recorded in the General

question 5

Multiple Choice

What type of transaction would not initially be recorded in the general ledger?

• A) Payment of a lawsuit settlement of $5 million
• B) Payroll
• C) Disposal of long-term assets
• D) Issuance or retirement of bonds and stock

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Definitions:

Average Fixed Cost

The fixed costs (costs that do not vary with output) divided by the quantity of output produced.

Marginal Cost

The expense addition due to the manufacture of one more product or service unit.

Average Variable Cost

The total variable costs (e.g., materials, labor) divided by the quantity of output produced, representing the variable cost per unit.

Marginal Cost

The hike in cost associated with the creation of an extra unit of a good or service.