If Collection of Accounts Receivable Is Assured, Then Accounts Receivable

question 96

True/False

If collection of accounts receivable is assured, then accounts receivable are considered to be cash equivalents.

---

Definitions:

Contribution Approach

An accounting method where all variable costs are subtracted from sales to find the contribution margin, which is then used to cover fixed costs and profits.

Cost Formula

An equation used to predict costs, often relating total costs to the level of activity or volume of output.

Selling

The process of promoting and exchanging goods or services for money.

Administrative Expenses

Administrative Expenses are costs related to the general operations and administration of a business that are not linked directly to the manufacturing or selling of products or services.