The Smaller the Contribution Margin Ratio, the Smaller the Amount

question 124

True/False

The smaller the contribution margin ratio, the smaller the amount of sales required to cover a given amount of fixed expenses.

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Definitions:

Voucher System

A method of accounting in which documents are used to authorize and record transactions.

Cash Receipts

Money received by a business from its operations, including cash sales and collections on credit accounts.

Bank Reconciliation

The process of comparing and adjusting the balance of an account as reported by a bank to the balance in a company’s financial records.

Maximum Benefit

The highest possible advantage or gain that can be achieved from a particular action or resource.