Alpha Company Issues a Trade Acceptance with Itself and Beta

question 41

Multiple Choice

Alpha Company issues a trade acceptance with itself and Beta Company as parties. A trade acceptance is

• A)a draft.
• B)an order to accept delivery of money.
• C)a promise to accept delivery of goods.
• D)a promise to deliver goods.

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Definitions:

Net Operating Income

A measure of a property's profitability, calculated by subtracting all operating expenses from the gross operating income.

Variable Costing

An accounting method that considers only variable production costs (such as materials and labor) in the calculation of product costs.

Net Operating Income

The profit derived from a company's regular business operations after deducting operating expenses such as rent, wages, and utilities.

Direct Labor Cost

The total cost of workforce expenses directly involved in the manufacturing of products or delivery of services, excluding indirect labor costs.