Which of the Following Indicators Is Not an Example of an Event

question 23

Multiple Choice

Which of the following indicators is not an example of an event that casts doubts on the going concern status of the business?

• A) a court decision with immaterial damages against the business
• B) major uninsured fire damage
• C) recoverability of trade receivables during a recession
• D) denial of a significant credit line

Understand the differences between merchandising and service companies in generating net income.

Grasp the concept of merchandise inventory, its reporting, and its role in a merchandising company's operating cycle.

Learn the importance of sales terms and conditions, including the FOB shipping point and destination, purchase discounts, allowances, and returns in managing revenues and expenses.

Understand the calculation and interpretation of financial ratios like the gross margin ratio to evaluate a company's operational efficiency.

---

Definitions:

Fixed Input

An input whose quantity is fixed for a period of time and cannot be varied (for example, land).

Capital

Resources, including finances and assets, used by businesses to fund their operations and investments.

Variable Input

An input whose quantity the firm can vary at any time to increase or decrease production.

Total Product Curve

The total product curve illustrates the relationship between the quantity of inputs used in production and the quantity of output produced, demonstrating the law of diminishing returns.