Which of the Following Changes Describes the Collection of $7,000

question 119

Multiple Choice

Which of the following changes describes the collection of $7,000 from customers who had been charged on account for services performed during a previous accounting period?

• A)Assets and shareholders' equity increase by $7,000.
• B)Assets and liabilities increase by $7,000.
• C)Assets and liabilities decrease by $7,000.
• D)No changes in total assets, liabilities, or shareholders' equity.

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Definitions:

Operating Leverage

A financial ratio that measures the degree to which a company can increase operating income by increasing revenue.

CVP Graph

A graphical depiction of the Cost-Volume-Profit analysis, showing how a company's profits, costs, and sales volume are related.

Break-even Point

The level of production or sales at which total revenues equal total expenses, with no net loss or gain.

Total Sales Revenue

The overall income generated from selling goods or services before any expenses are subtracted.