Cash Receipts from Customers Are Greater Than Sales Revenues When

question 78

Multiple Choice

Cash receipts from customers are greater than sales revenues when there is a(n)

• A)increase in accounts receivable.
• B)decrease in accounts receivable.
• C)increase in cost of goods sold.
• D)decrease in cost of goods sold.

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Definitions:

Fixed Expenses

Costs that remain constant over a period and are not affected by changes in business activity levels.

Variable Expenses

Costs that vary directly with the level of activity or production output, such as raw materials and direct labor.

Break-even Point

The point at which total costs and total revenues are equal, meaning there is no profit or loss.

Variable Expenses

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