Which of the Following Statements Is True of Costs Associated

question 56

Multiple Choice

Which of the following statements is true of costs associated with goods for sale?

• A) Appraisal costs is a subcategory of shrinkage costs.
• B) Special processing costs are always part of purchasing costs.
• C) All inventory costs are not available in financial accounting systems.
• D) Stockout costs are costs that arise when a company runs out of a particular item for which there is no customer demand.

---

Definitions:

Commercial Bank Loans

are loans that businesses and individuals can obtain from a commercial bank to finance various needs, such as business expansion or personal expenses.

Short-Term Financing

Refers to borrowing funds for a period of less than one year to meet immediate financial requirements.

Spontaneous Financing

Financing that naturally increases as a firm's operating levels increase, typically through trade credits and accruals.

Five Year Bonds

Debt securities issued with a maturity of five years, typically paying interest semi-annually.