Companies Should Only Produce and Sell Units as Long as ________

question 158

Multiple Choice

Companies should only produce and sell units as long as ________.

• A) there is customer demand for the product
• B) the competition allows it
• C) the revenue from an additional unit exceeds the cost of producing it
• D) there is a generous supply of low-cost direct materials

---

Definitions:

Cash Basis

An accounting method where revenues are recognized when cash is received, and expenses are recorded when cash is paid.

Debit Portion

The side of an accounting entry that increases asset or expense accounts or decreases liability, equity, or revenue accounts.

Asset Account

A category in accounting ledgers that records the increases and decreases in specific assets owned by a business.

Liability Account

An account on a company's balance sheet representing debts or obligations that the company owes to others.