If MC > MR

question 139

Multiple Choice

If MC > MR,

• A)output should be reduced.
• B)marginal profit is positive.
• C)there are losses.
• D)output should be increased.

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Definitions:

Contra-Revenue Accounts

Accounts used to record reductions in gross revenue, such as sales returns, allowances, and discounts, to arrive at net revenue.

Gross Profit

The financial metric calculated by subtracting the cost of goods sold from total sales revenue, representing the efficiency of a company in managing its production and sales.

Perpetual System

An inventory system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period for accurate financial reporting.