What Is the Effect on the Balance Sheet of Making

question 92

Multiple Choice

What is the effect on the balance sheet of making cash sales of inventory to customers on profit?

• A) Assets and equity increase.
• B) Assets and equity decrease.
• C) Assets decrease and equity increases.
• D) Assets increase and equity decreases.

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Definitions:

Demand Curve

A graph that shows the relationship between the price of a good and the quantity of that good consumers are willing to purchase at various prices.

Natural Monopolist

A natural monopolist is a single supplier in a market that can produce the total quantity of a good or service demanded at a lower cost than if there were multiple suppliers, due to high fixed costs and economies of scale.

Price-Regulated

A market condition where the government sets the maximum or minimum prices for certain goods or services to protect consumer interests or ensure affordability.

Marginal Cost

The extra expense associated with the creation of an additional unit of a product or service.