Accounts Receivable Is an Asset That Arises When a Company

question 60

Multiple Choice

Accounts receivable is an asset that arises when a company:

• A)purchases goods or services on credit.
• B)sells goods or services on credit.
• C)purchases goods or services for cash.
• D)sells goods or services for cash.

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Definitions:

Economists

Experts or professionals who study, develop, and apply theories and concepts in economics to analyze how societies utilize scarce resources.

Monopoly

A market condition where a single firm has exclusive control over a product or service, eliminating competition.

Negative Externalities

Adverse effects suffered by a third party or the public as a result of an economic transaction or activity.

Principal-Agent Problem

At a firm, a conflict of interest that occurs when agents (workers or managers) pursue their own objectives to the detriment of the principals’ (stockholders’) goals. In public choice theory, a conflict of interest that arises when elected officials (who are the agents of the people) pursue policies that are in their own interests rather than policies that would be in the better interests of the public (the principals).