What Is the Primary Force That Determines What a Firm

question 73

Multiple Choice

What is the primary force that determines what a firm buys and sells?

• A) Laws of supply and demand
• B) The demand and supply schedule
• C) Economic resources
• D) Equilibrium price
• E) The private enterprise system

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Definitions:

Cash Realizable Value

The amount of cash expected to be received from assets or receivables after accounting for discounts or allowances.

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.

Allowance

An accounting practice that reduces the value of assets or income for the purpose of conservative financial reporting and tax savings.

Percentage of Receivables Method

The percentage of receivables method is an accounting technique used to estimate the amount of a company's accounts receivable that will not be collected, based on past experience.