In the Long Run, Which of the Following Is Present

question 10

Multiple Choice

In the long run, which of the following is present in a perfectly competitive market?

• A) Many firms in the market
• B) Barriers to entry
• C) Firms incurring an economic loss in the long run
• D) Firms making an economic profit in the long run

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Definitions:

Adjusting Journal Entry

A journal entry made at the end of an accounting period to allocate income and expenses to the appropriate periods.

Allowance for Doubtful Accounts

This is a subsidiary asset account created to approximate the amount of accounts receivable that could potentially be non-collectable.

Bad Debts Expense

An expense account reflecting estimated uncollectible amounts from customers for credit sales made in a specific period.

Aging of Accounts Receivable

A process of categorizing accounts receivable according to the length of time an invoice has been outstanding.