The Size of the Multiplier

question 269

Multiple Choice

The size of the multiplier

• A) is unaffected by the amount of time that elapses.
• B) increases in the long run.
• C) decreases in the long run.
• D) is constant in the long run.

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Definitions:

Gross Profit Rate

A financial metric that measures the difference between sales and the cost of goods sold, expressed as a percentage of sales.

Merchandise Inventory

The goods a company holds for the purpose of resale to customers.

Customer Refunds Payable

A liability account for estimated refunds and allowances that will be paid or granted customers in the future.

Merchandise Returns

Goods returned by the buyer to the seller, often due to defects, wrong size, or dissatisfaction.