Of the Five Expenses That Follow, Which One Is Most

question 56

Multiple Choice

Of the five expenses that follow, which one is most likely treated differently than the others when income taxes are considered in a discounted-cash-flow analysis?

• A) Salaries expense.
• B) Advertising expense.
• C) Depreciation expense.
• D) Utilities expense.
• E) Office expense.

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Definitions:

Credit Cards

Financial instruments that allow users to borrow funds from a pre-approved limit to pay for goods and services, with the expectation of paying back the borrowed amount along with any applicable interest.

Opportunity Cost

The value of the next best alternative that is foregone as a result of making a decision to pursue a particular action.

Holding Money

The act of keeping money in cash or in accounts as savings rather than investing it.

Interest Rate

The interest rate is the cost of borrowing money or the return on investment for savings, expressed as a percentage of the principal amount per period of time.