For Something to Serve as Money, It Must Be

question 496

Multiple Choice

For something to serve as money, it must be

• A) backed by the authority of the government.
• B) generally accepted by buyers and sellers.
• C) light, durable, and common.
• D) convertible to gold.

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Definitions:

Residual Income

The net operating income that an investment center earns above the minimum required return on its operating assets.

Average Operating Assets

The average value of the assets used in the day-to-day operations of a business, calculated over a certain period of time.

Sales

The total revenue generated from selling goods or services.

Variable Expenses

Costs that vary in direct proportion with the level of production or sales volume, such as raw materials and sales commissions.