During Its First Year of Business,Mega,Inc

question 58

Multiple Choice

During its first year of business,Mega,Inc.earned revenues of $400,000,of which it collected only $310,000 in cash.Which of the following statements is CORRECT?

• A)The income statement will show Cash collected from customers of $310,000.
• B)The balance sheet will show Accounts receivable of $310,000.
• C)The income statement will show Revenues of $310,000.
• D)The income statement will show Revenues of $400,000.

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Definitions:

Inflation

The rate of growth in the average price of goods and services, which leads to a decline in the power of currency to buy goods.

Money-Supply Curve

A graphical representation showing the relationship between the quantity of money in the economy and the price level or interest rate.

Federal Reserve

The central banking system of the United States, responsible for setting monetary policy, regulating banks, maintaining financial stability, and providing financial services to depository institutions, the U.S. government, and foreign official institutions.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.