Which of the Following Cost Behaviours Cannot Be Accurately Represented

question 271

Multiple Choice

Which of the following cost behaviours cannot be accurately represented by a single straight line?

• A) Step costs
• B) Mixed costs
• C) Fixed costs
• D) Variable costs

Understand the importance of cash discounts in the decision to offer credit.

Comprehend how changes in credit terms affect the cost of credit for customers.

Recognize the terms used in credit management such as receivables period and inventory turnover.

Understand the methodologies for analyzing the creditworthiness of potential customers.

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Definitions:

Revenue

The total amount of income generated by the sale of goods or services related to a company's primary operations.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period.

Retail Company

A business entity that sells goods or commodities directly to consumers through various channels of distribution to earn a profit.

Credit Sales

Sales made on terms that allow the buyer to make payments at a later date, affecting the seller's accounts receivable.