When a Company Performs a Service and Immediately Collects the Cash

question 107

Multiple Choice

When a company performs a service and immediately collects the cash from the customer, which of the following would occur?

• A)Stockholders' equity would decrease.
• B)Assets would decrease.
• C)Expenses would decrease.
• D)Net income would increase.

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Definitions:

Pounds

A unit of weight commonly used in the British imperial and United States customary systems.

Materials Quantity Variance

Materials quantity variance is the difference between the actual quantity of materials used in production and the expected amount, multiplied by the standard cost of those materials, indicating efficiency in usage.

Price Standard

A predetermined cost that serves as a benchmark for evaluating the actual cost of goods sold or production costs.

Pounds

A unit of mass or weight commonly used in the British imperial and United States customary systems.