Which of the Following Factors Would Be an Indication of High

question 57

Multiple Choice

Which of the following factors would be an indication of high quality earnings?

• A) Earnings are close to cash.
• B) Earnings are the result of repeat business.
• C) Revenue recognition is based on the installment principle.
• D) All of the above.
• E) None of the above.

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Definitions:

Marginal Cost

The increase in cost resulting from the production of one additional unit of a good.

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a company.

AVC

Average Variable Cost, which refers to the total variable cost per unit of output in a business, where variable costs change with the level of production.

MC

Marginal Cost, the cost of producing one additional unit of a product or service.