The Mix of Capital Components in Use by a Company

question 4

True/False

The mix of capital components in use by a company at a point in time is known as its capital structure. This capital structure is generally described in terms of percentages referring to the relative sizes of the components.

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Definitions:

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for, recorded as an asset on the balance sheet.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the amount of receivables that may not be collectible.

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business entity.

Division of Partnership Income

The method or agreement by which profits are distributed among partners in a partnership.