What Is a Firm's Primary Interest When It Hires an Additional

question 9

Multiple Choice

What is a firm's primary interest when it hires an additional worker?

• A)The cost of hiring the additional worker.
• B)How the average output of the firm will be affected by this new worker.
• C)The extra revenue the firm realises from hiring that worker.
• D)Whether or not the new worker gets along with the firm's existing workers.

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Definitions:

Uncollectible Receivables

Accounts receivable that a company does not expect to collect and writes off as a loss.

Credit Sales

Sales transactions where the payment is deferred to a future date, typically resulting in the creation of accounts receivable.

Allowance for Doubtful Accounts

An allowance for doubtful accounts is a contra-account that reduces the total receivables on the balance sheet by the amount that is estimated to be uncollectible.

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect because customers default on their payments.