If a Business Pays $1,100 on Account to a Creditor,the

question 34

Multiple Choice

If a business pays $1,100 on account to a creditor,the effect of the payment is a decrease to cash and a(n)

• A) decrease to Fees Income.
• B) increase of capital.
• C) increase to accounts receivable.
• D) decrease to accounts payable.

---

Definitions:

Zero Economic Profit

Occurs when a firm's total revenues are exactly equal to its total costs, including both explicit and implicit costs, indicating no abnormal profit above the normal rate of return.

Continue to Produce

The decision by a business to maintain production activities, often evaluated in the context of profitability and market demand.

MR = MC

The economic principle where marginal revenue equals marginal cost; it is optimal for firms pursuing profit maximization.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms make normal profits in a competitive market.