Whenever an Input Makes Up a Large Percentage of a Good's

question 96

Multiple Choice

Whenever an input makes up a large percentage of a good's final cost, an increase in that input's price will

• A) affect total cost relatively more.
• B) not affect total revenues.
• C) affect only accounting profits.
• D) cause the firm to shutdown.

---

Definitions:

Journal Entry

A record that captures all the financial transactions of a business, displaying debits and credits in the accounting system.

Aging Method

An accounting technique used to estimate the amount of a company's bad debts based on the age of its receivables.

Bad Debts Expense

The cost recognized by businesses for uncollectible accounts receivable due to customer defaults.

Installment Accounts Receivable

Money owed to a company for goods or services purchased on a payment plan, typically including interest charges.