Collection of a $500 Accounts Receivable

question 134

Multiple Choice

Collection of a $500 Accounts Receivable

• A)increases an asset $500; decreases an asset $500.
• B)increases an asset $500; decreases a liability $500.
• C)decreases a liability $500; increases equity $500.
• D)decreases an asset $500; decreases a liability $500.

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Definitions:

Financial Information

Data regarding the financial status, operations, and cash flows of a business, useful for decision-making purposes.

Operating Efficiency

A measure of how well a company utilizes its resources to generate profits, often indicated by the ratio of output produced to input used.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is used to finance its overall operations and growth.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments on outstanding debt with its operating income.