Which of the Following Statements Is FALSE

question 2

Multiple Choice

Which of the following statements is FALSE?

• A)After a firm decides on its credit standards,it must next establish its credit terms.
• B)The decision of how much credit risk to assume plays a large role in determining how much money a firm ties up in its payables.
• C)Knowledge of the payments pattern is also useful for forecasting the firm's working capital requirements.
• D)An aging schedule categorizes accounts by the number of days they have been on the firm's books.

Calculate consolidated retained earnings and understand its implications.

Prepare Plax Inc.'s Consolidated Statement of Financial Position.

Understand the effects of intercompany transactions and their elimination in consolidated statements.

Comprehend the cost and equity methods of accounting for investments.

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Definitions:

Marginal Cost

The amount of money spent to manufacture one additional unit of a product or service.

Adam Smith

Was an 18th-century Scottish economist and philosopher, known as the "father of modern economics" for his influential work on the nature and causes of the wealth of nations.

Economies of Scale

Cost advantages that enterprises obtain due to scale of operation, with cost per unit of output decreasing with increasing scale.

Marginal Output

Refers to the additional output that results from using one more unit of a production input, such as labor or capital, in the production process.