At the Breakeven Point

question 113

Multiple Choice

At the breakeven point:

• A) Sales will be equal to variable costs plus target profit
• B) Sales will be equal to variable costs plus fixed costs
• C) Sales will be equal to fixed costs plus target profit
• D) Fixed costs will be equal to variable costs

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Definitions:

Accounts Receivable

Money owed by customers to a company for goods or services that have been delivered or used but not yet paid for.

Credit Sales

Sales for which payment is not received at the time of purchase, allowing customers to pay at a later date, thereby creating receivables for the seller.

Cash Sales

Transactions where payment is made in cash at the time of purchase, without the extension of credit.

Inventory

The goods and materials that a business holds for the ultimate purpose of resale or production.