Which of the Following Activities Affects Net Income,but Has No

question 76

Multiple Choice

Which of the following activities affects net income,but has no immediate impact upon cash flows?

• A)Collection of an account receivable
• B)Making the end-of-period adjustment to record estimated uncollectible accounts
• C)Investing excess cash in marketable securities
• D)Write-off of an uncollectible account receivable against the allowance

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Definitions:

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, where no single party can influence the market price.

Complementary Resource

A good or service that enhances the value or performance of another primary product or service.

Profit-maximizing Firm

A company that adjusts its production and sales strategies to achieve the highest possible profit, considering its costs and market demand.

Substitution Effect

This effect describes the change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute more expensive items with cheaper ones.