If You Buy Something with the Intent to Pay Later

question 44

Multiple Choice

If you buy something with the intent to pay later rather than in cash,the seller will set up an account _____.

• A)depreciable
• B)receivable
• C)expense
• D)liability

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Definitions:

Long Run

Refers to a period during which all factors of production and costs are variable, allowing full adjustment to production decisions.

Fixed Costs

Expenses that remain constant regardless of the amount of goods or services produced, like lease payments or wages.

Long-Run Average Cost Curve

A curve that shows the lowest average cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Short-Run

A period during which at least one input (for example, plant size, machinery) in the production process is fixed and cannot be changed.