A Decrease in Collection Efforts Will Result In_________ in Sales

question 101

Multiple Choice

A decrease in collection efforts will result in_________ in sales volume, _________in the investment in accounts receivable,_________ in bad debt expenses, and_________ in collection expenditures.

• A) an increase; a decrease; an increase; a decrease
• B) an increase; a decrease; an increase; an increase
• C) an increase; an increase; an increase; a decrease
• D) a decrease; a decrease; a decrease; an increase

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Definitions:

Price Skimming

A pricing strategy where a firm charges the highest initial price that customers are willing to pay and then lowers it over time.

Fixed Costs

Expenses that do not change in the short term, regardless of the level of production or sales activity, such as rent or salaries.

Variable Costs

Costs that vary directly with the level of production or sales, such as materials and labor.

Breakeven Point

The point at which total cost and total revenue are equal, meaning no net loss or gain, and the business is not making a profit.