A Business Renders Services to a Client and Issues a Sales

question 76

Multiple Choice

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following would be true at the time the invoice is issued?

• A)stockholders' equity will decrease
• B)total liabilities will increase
• C)total assets will decrease
• D)net income will increase

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Definitions:

Discount Rate

The rate of interest applied to calculate the present value of future cash flows.

Net Present Value

A method used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period of time.

Investment Project

A project requiring capital investment, aiming to generate financial returns or benefits in the future.

Cash Operating

Refers to the activities that involve the cash inflows and outflows from a company's primary business operations.