The Rule for Converting Credit Sales to Cash Received from Debtors

question 40

Multiple Choice

The rule for converting credit sales to cash received from debtors is:

• A) income +/- debtors at the beginning +/- debtors at the end = cash received.
• B) income + debtors at the beginning - debtors at the end = cash received.
• C) income - debtors at the beginning + debtors at the end = cash received.
• D) none of the above.

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Definitions:

Fiscal Policy

Government policy regarding taxation and spending to influence the economy.

Monetary Policy

The process by which a central bank, currency board, or other regulatory authority manages the supply of money in an economy, primarily through interest rates to achieve macroeconomic objectives like inflation, consumption, growth, and liquidity.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Taxing

The act of imposing taxes on individuals or businesses by the government to generate revenue for public expenditures.