Average Fixed Costs Diminish Continuously as Output Increases

question 395

True/False

Average fixed costs diminish continuously as output increases.

---

Definitions:

Allowance Method

An accounting technique that estimates and sets aside a portion of accounts receivable deemed likely uncollectible.

Uncollectible Receivables

Accounts receivable that the company does not expect to collect, often recognized as bad debt expense.

Settlement

The process of finalizing a transaction where the buyer pays the seller, and the seller transfers ownership of an asset, or the resolution of a dispute.

Maturity Value

The amount that will be paid to the holder of a financial instrument at the instrument's maturity date, including principal and any accrued interest.