What Is the Required Adjustment to ABC's Accounts Receivable at Year-End

question 35

Multiple Choice

What is the required adjustment to ABC's accounts receivable at year-end as a result of this transaction?

• A) CDN$450 decrease.
• B) CDN$900 increase.
• C) CDN$450 increase.
• D)Nil.

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Definitions:

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in total with the level of activity but having a portion that remains constant.

Variable Cost

Costs that vary directly with the level of production or service activity.

Fixed Cost

Expenses that do not change with the level of production or sales over the short term, such as rent, salaries, and insurance.

Period Cost

An expense that is not directly tied to the production process but rather incurred over a specific time period.