When Does Consumption Occur

question 122

Multiple Choice

When does consumption occur?

• A)It occurs instantly for durable goods
• B)It occurs over short periods for durable goods.
• C)It occurs over long periods for nondurable goods.
• D)It occurs instantly and takes no time.
• E)It does not occur instantly but takes time.

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Definitions:

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Sales

Revenues earned by a company from the sale of goods or services before any expenses are deducted.

Accounts Payable

Short-term liabilities representing amounts owed by a business to suppliers or creditors for goods and services received.

Cost of Goods Sold

The immediate expenses related to manufacturing the products a company sells, such as materials and labor.