Each of the Following Is a Source of Financial Capital

question 263

Multiple Choice

Each of the following is a source of financial capital for a corporation EXCEPT

• A) issuing new stock.
• B) reinvestment of profit or retained earnings.
• C) issuing bonds or borrowing funds from a bank.
• D) dividends.

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Definitions:

Favorable Cost Variance

A variance that occurs when the actual cost is less than standard cost.

Standard Cost

A predetermined cost of manufacturing, storing, and marketing a product, used for budgeting and performance evaluation.

Variances

Differences between planned or expected financial performances to the actual financial performance.

Standard Costs

Predetermined costs for materials, labor, and overhead that are used as benchmarks to measure actual performance against expected results.