A Firm Will Shut Down in the Short Run If

question 110

Multiple Choice

A firm will shut down in the short run if

• A) total fixed costs are too high.
• B) total revenue from operating would not cover all costs.
• C) total revenue from operating would not cover variable costs.
• D) total revenue from operating would not cover fixed costs.

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Definitions:

Revenue Ledger

A division of the general ledger where all income transactions of a business are recorded, including sales, interest, and dividends.

Subsidiary Ledger

A detailed ledger that provides a breakdown of information summarized in the general ledger, often for accounts like Accounts Receivable or Accounts Payable.

Sales Returns And Allowances

A reduction in sales revenue resulting from customers returning goods or receiving discounts for faulty or unsatisfactory products.

Sales Tax Payable

An account responsible for tracking the sales tax gathered from buyers, due to be paid to the authorities.