The Expense Example That Is a Classification by Nature Rather

question 21

Multiple Choice

The expense example that is a classification by nature rather than by function is:

• A) depreciation expense
• B) administrative expenses
• C) marketing expenses
• D) occupancy expenses

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Definitions:

Tax-Free Acquisition

An acquisition in which the acquired company's shareholders do not have to pay taxes on the securities or cash they receive as part of the acquisition deal.

Business Purposes

The intention behind an action or decision in the context of conducting business.

Selling Shareholders

Investors or entities that own a company's shares and are selling them in a public offering or private sale.

Net Operating Losses

Financial losses that a company reports when its operating expenses exceed its revenues, which can be used for tax relief.