The Collection of Cash from a Cash Sale Would

question 37

Multiple Choice

The collection of cash from a cash sale would:

• A)increase assets and stockholders' equity.
• B)increase assets and decrease liabilities.
• C)decrease assets and increase net income.
• D)have no effect on net income or stockholders' equity.

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Definitions:

Disposable Income

The net income available to households or individuals after accounting for taxes, which can be spent on consumption or savings.

Consumption

The use of goods and services by households, one of the primary components that determine the overall level of economic activity in an economy.

Billion

A numerical value represented as 1,000 million (1,000,000,000) in the short scale, commonly used in financial and demographic statistics.

MPS

The marginal propensity to save, which is the proportion of an additional unit of income that is saved rather than spent.