A Sales Invoice Is Prepared When Goods

question 34

Multiple Choice

A sales invoice is prepared when goods

• A)are sold for cash.
• B)are sold on credit.
• C)sold on credit are returned.
• D)are sold on credit or for cash.

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Definitions:

Operating Leverage

The extent to which a company uses fixed costs in its operations, affecting its potential for higher profits or losses with changes in sales volume.

Selling Price

The amount of money for which something is sold to a buyer, after considering production, marketing, and distribution costs.

Fixed Cost

Fixed costs, including rent, salaries, and insurance, stay the same no matter how much is produced or sold.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, contributing towards covering fixed costs and earning profit.