The Titles of Functional Cost Accounts Show the Purpose for Which

question 218

True/False

The titles of functional cost accounts show the purpose for which expenditures are made.

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Definitions:

Operating Expenses

Expenses incurred through normal business operations, such as salaries, rent, utilities, and office supplies, which are not directly tied to the production of goods or services.

Sales Revenue

Sales Revenue is the income received by a company from its sales of goods or the provision of services, before any costs or expenses are deducted.

Gross Profit Rate

The ratio of gross profit to net sales, representing the efficiency with which a company uses its resources to produce goods and services.

Operating Expenses

Costs associated with the day-to-day operations of a business that are not related to direct production.