A Cost That Has Been Incurred Irrevocably by Past Actions

question 26

Multiple Choice

A cost that has been incurred irrevocably by past actions is a(n) :

• A)Capital expenditure.
• B)Incremental cost.
• C)Sunk cost.
• D)Fixed cost.

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Definitions:

Voluntary Winding Up

A process initiated by a company's shareholders to close the company, selling off its assets to pay creditors and distributing any remaining assets to shareholders.

Receivership

The first form of external administration prescribed by the Corporations Act. Receivership involves a receiver, receiver–manager or controller being appointed by a court or by secured creditors in order to protect the security of those creditors.

Liquidation

The third form of external administration prescribed by the Corporations Act. The process whereby a company is dissolved, at which point the company ceases to be a legal entity.