Use the Table Below to Answer the Following Questions

question 84

Multiple Choice

Use the table below to answer the following questions.
Table 12.2.1

-Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm. If the firm produces 3 units of output, it will

• A)make an economic profit of $4.
• B)make an economic profit of $90.
• C)incur an economic loss of $4.
• D)break even.
• E)incur an economic loss of $86.

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Definitions:

Recognizing Receivable

The accounting process of recording revenue when earned and receivables that are expected to be collected, regardless of cash receipt.

Allowance Account

An account used to record reductions in the book value of accounts receivable due to potential future defaults on payments.

Doubtful Accounts

Doubtful accounts represent receivables that a company is uncertain to collect, typically categorized separately to reflect potential losses.

Cash Discount

A reduction in the invoice amount by the seller if the buyer pays their bill within a specified time frame, incentivizing prompt payment.