The Following Sales Budget Has Been Prepared: Collection of Credit

question 33

Multiple Choice

The following sales budget has been prepared: Collection of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What is the expected balance of Accounts Receivable at October 31?

• A)$72,500
• B)$110,000
• C)$118,000
• D)$180,000

---

Definitions:

MC = MR

An economic principle stating that to maximize profits, firms should produce up to the point where marginal cost equals marginal revenue.

MC = MR

The principle that profit maximization occurs when a firm's marginal cost (MC) equals its marginal revenue (MR).

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the surplus revenue after accounting for all costs.

Economic Loss

A situation where total costs exceed total revenues, indicating that a firm is not covering its opportunity costs.