An Additional Cost Incurred Only If a Particular Action Is

question 56

Multiple Choice

An additional cost incurred only if a particular action is taken is a(n) :

• A) Period cost.
• B) Pocket cost.
• C) Discount cost.
• D) Incremental cost.
• E) Sunk cost.

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Definitions:

Buy Warrants

Options that give the holder the right to purchase a company's stock at a specified price before a certain date.

Employee Stock Option

A privilege, sold by one party to another, that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price within a certain period or on a specific date.

Fixed Price

A pricing strategy where the cost of goods or services is set at a specific amount and does not fluctuate.

Buy Shares

The act of purchasing ownership interests in a company, thereby becoming a shareholder entitled to dividends and capital gains.