What Differentiates a Savings Deposit from a Small-Denomination Certificate of Deposit

question 99

Multiple Choice

What differentiates a savings deposit from a small-denomination certificate of deposit (CD) ?

• A) A CD has a fixed maturity date; a savings deposit can be withdrawn at any time.
• B) A savings deposit cannot be withdrawn before its maturity date without incurring a penalty; funds in a CD are available at any time with no interest penalty.
• C) Only a savings deposit is a time deposit.
• D) All depository institutions accept savings deposits, whereas only a thrift institution can issue a CD.

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Definitions:

Absorption Costing

A method of inventory costing that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Cost of Products Manufactured

The total expense incurred by a company to produce goods over a specific period, including costs associated with materials, labor, and overhead.

Absorption Costing

Absorption costing is an inventory valuation method that incorporates all costs associated with manufacturing, including direct materials, direct labor, and all manufacturing overhead expenses, both variable and fixed, into the product cost.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in unit product cost.