Receiving Cash from a Customer for Settlement of an Accounts

question 82

Multiple Choice

Receiving cash from a customer for settlement of an Accounts Receivable will

• A)decrease Stockholders' Equity.
• B)increase net income.
• C)increase total assets.
• D)not affect total assets.

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Definitions:

Net Profit Margin Ratio

A profitability measure that calculates the percentage of net income derived from total revenues.

Operating Expenses

Operating expenses encompass the costs associated with running the day-to-day operations of a business, excluding the cost of goods sold, such as rent, utilities, and payroll.

Net Profit Margin

A financial metric that shows the percentage of profit derived from revenue after all expenses are deducted.

Financial Information

Data related to the financial performance and financial position of a company, including income statements, balance sheets, and cash flow statements.