The Accounts Payable of a Company Changed from $136,100 to $104,300

question 20

Multiple Choice

The accounts payable of a company changed from $136,100 to $104,300 over the course of a year. This change represents a:

• A) use of $31,800 of cash as investment activity.
• B) source of $31,800 of cash as an operating activity.
• C) source of $31,800 of cash as a financing activity.
• D) source of $31,800 of cash as an investment activity.
• E) use of $31,800 of cash as an operating activity.

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Definitions:

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Profit Maximization

The process or strategy businesses employ to ensure the highest possible profit is achieved, typically by increasing revenue, reducing costs, or both.

Demand Schedule

A demand schedule is a table that shows the amount of a product or service consumers are willing and able to purchase at various prices during a specified period.

Profit-Maximizing Price

The price level at which a firm can achieve the highest possible profit on its product, based on its cost structure and the demand curve it faces.