Which of the Following Accurately Describes How the Collection of Cash

question 35

Multiple Choice

Which of the following accurately describes how the collection of cash on account from a customer would affect the ratios indicated?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Gain

Gain refers to an increase in economic benefits or inflow of assets that result in an increase in equity, not related to contributions from equity participants.

Office Equipment

Assets like computers, desks, and chairs used in an office to carry out operations, not immediately consumed in the production process.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future.