Which of the Following Is True of Expense Items Purchased

question 190

Multiple Choice

Which of the following is true of expense items purchased by organizational buyers?

• A)The cost of these products is charged against the income of the company in the year of purchase.
• B)The net income of these products is determined by charging a portion of their cost against the company's annual revenue.
• C)These items are long lived business assets that must be depreciated over time.
• D)All major expenses such as setting up new plants, equipments and machinery are included in this category.

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Definitions:

Stock Investments

Investments made by purchasing shares of companies in the hope of earning dividends or selling the shares at a higher price.

Insignificant Influence

A situation where an investor does not have the power to participate in the financial and operating policy decisions of another entity.

Credit Sale

A transaction where goods or services are provided to a customer with an agreement to pay later, often within a specified timeframe.

Translated

In finance, "translated" often refers to converting financial statements or amounts from one currency into another to facilitate comparison or consolidation.