On October 3, Josh Antonio, a Carpenter, Received a Cash

question 107

Multiple Choice

On October 3, Josh Antonio, a carpenter, received a cash payment for services previously billed to a client. Josh paid his telephone bill, and he also bought supplies on credit. For the three transactions, at least one of the entries will include a

• A) credit to Retained Earnings.
• B) credit to Notes Payable.
• C) debit to Accounts Receivable.
• D) credit to Accounts Payable.

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and costs are variable, enabling firms to make adjustments such that supply meets demand at a profit-maximizing level.

Overallocated

A condition where resources are distributed or used in excess of what is optimal or sustainable, leading to inefficiency and potential scarcity.

Underallocated

A situation where resources are not being used in the most efficient way, often leading to missed opportunities in sectors or markets.

Economic Profit

The total revenue of a business minus both the explicit and implicit costs, providing a more complete picture of a company's financial health.