Consider the Following Events for Betterment Incorporated: Under Cash-Basis

question 38

Multiple Choice

Consider the following events for Betterment Incorporated: Under cash-basis accounting,what is the appropriate day to record the expenses related to the gasoline?

• A)January 1.
• B)January 9.
• C)January 12.
• D)January 13.

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Definitions:

Variable Cost

A cost that varies directly and proportionally with changes in production volume or activity level, such as materials and labor costs.

Profit Margin

The ratio of a company's net income to its revenue, indicating the percentage of profit made from sales.

Operating Expenses

Expenses incurred through normal business operations, such as rent, utilities, and payroll.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor costs.