If Services Are Rendered for Credit Then

question 149

Multiple Choice

If services are rendered for credit then

• A) assets will decrease.
• B) liabilities will increase.
• C) owner's equity will increase.
• D) liabilities will decrease.

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Definitions:

Carrying Costs

The expenses associated with holding inventory, including storage, insurance, taxes, and opportunity costs, which can affect a company's profitability.

Shortage Costs

Costs incurred when the demand for a product or service exceeds the supply, leading to potential loss of sales or customer dissatisfaction.

Restrictive Policy

A policy designed to limit or restrict certain actions, often used to control spending or investments.

Cash-Out Situation

A scenario where an individual withdraws funds from an investment or refinances a property to access the equity built up, often resulting in immediate liquid cash.