The Main Difference Between M1 and M2 Is That

question 47

Multiple Choice

The main difference between M1 and M2 is that:

• A) M1 includes some less liquid assets in addition to the assets in M2.
• B) M1 includes more liquid assets in addition to the assets in M2.
• C) M2 includes some less liquid assets in addition to the assets in M1.
• D) M2 includes more liquid assets in addition to the assets in M1.

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Definitions:

Variable Cost

Variable costs are expenses that change in proportion to the activity of a business, such as materials and labor costs.

Fixed Manufacturing Overhead

Consists of production costs that do not change with the volume of manufacturing activity, such as rent for the manufacturing facilities or salaries of plant managers.

Deferred

Postponed or delayed, often referring to expenses or revenues that are recognized at a date later than when they were incurred or earned.

Released

The action of making something available to the public, such as a product, movie, or software.