-Refer to Table 3-6

question 110

Multiple Choice

-Refer to Table 3-6. If Denmark and Italy trade based on the principle of comparative advantage, which country will export or import each product?

• A) Denmark will export bread, and Italy will export cheese.
• B) Denmark will export bread, and Italy will export bread.
• C) Denmark will export cheese, and Italy will export cheese.
• D) Denmark will export cheese, and Italy will export bread.

---

Definitions:

Net Credit Sales

The total value of sales made on credit during a period, minus any sales returns or allowances.

Accounts Receivable

Outstanding payments from clients or customers to a company for delivered goods or services that remain unpaid.

Factoring Transaction

The process where a business sells its accounts receivable (invoices) to a third party (factor) at a discount, in exchange for immediate cash.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards designed to ensure consistency, fairness, and accuracy in financial reporting and accounting practices in the U.S.