All of the Following Are True of Operating Expenses Except

question 44

Multiple Choice

All of the following are true of operating expenses except:

• A)Operating expenses are incurred for the purpose of producing revenue.
• B)Operating expenses are subdivided into the classifications of component and trend.
• C)The administrative expenses portion of operating expenses tends to remain constant from period to period.
• D)Subdividing operating expenses into different classifications helps managers and investors evaluate different aspects of the company's operations.

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Definitions:

Monthly Payments

Regular payments made once a month, commonly in the context of loans, rent, or other agreements.

Present Value

The present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Annuity

A financial instrument providing a steady series of payments to a person, mainly utilized as a source of income for people in retirement.

Compounded Monthly

The method of calculating interest where the interest earned is added to the principal at the end of each month, leading to interest on interest in subsequent months.