Selling Accounts Receivable Increases Which of the Following

question 86

Multiple Choice

Selling accounts receivable increases which of the following?

• A) current ratio
• B) accounts receivable turnover
• C) debt/equity
• D) effective tax rate

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Definitions:

Average Fixed Cost

Fixed cost divided by the quantity of output

Perfectly Competitive

A market structure characterized by many sellers and buyers, homogeneous products, no barriers to entry or exit, and perfect information, leading to optimal allocation of resources.

Market Price

The present cost at which a service or asset is available for purchase or sale on the market.

Marginal Cost

The financial outlay for creating an additional unit of a good or service.