Profits

question 303

Multiple Choice

Profits

• A) are a cost of doing business because entrepreneurs would not incur the risk of starting a business if they didn't expect to earn profits.
• B) are a cost of doing business because they are payments to others.
• C) are not a cost of doing business because they are owed to resource owners.
• D) are not a cost of doing business because they are often zero or negative.

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Definitions:

Bank Service Charges

Fees charged by a bank to its customers for account maintenance, transactions, and other banking services.

Outstanding Checks

Checks that have been written and recorded in accounting books but have not yet been cashed or cleared by the bank.

Bank Statement

A summary of all transactions mailed to the depositor or made available online by the bank each month.

Petty Cash System

A method used by businesses to manage small, daily expenses, involving a small store of cash on hand.