1. For a firm with revenue growing each month and a collection pattern that averages 55 days, the amount of cash collections during any one month will never exceed monthly sales for the same month. TRUE/FALSE

2. Assume that a profitable firm has been notified that all costs for the coming year will decrease by 2%. The firm will respond by decreasing all selling prices by 2%. The impact of these changes will be to

a. lower the breakeven point in sales dollars

b. increase the breakeven point in sales dollars

c. have no impact on the breakeven point in sales dollars

3. The company sells inventory costing $20,000 for $35,000. The customer has been billed for the sales price but has not yet paid the amount. This transaction

a. increases the balance of total assets

b. causes no change to the balance of total assets

c. decreases the balance of total assets

4. The company sells a machine that it purchased 5 years ago for $40,000. The original cost of the machine was $120,000 and $90,000 of accumulated depreciation was recorded just prior to sale. This event

a. increased the asset balance and increased net income

b. increased the asset balance and decreased net income

c. decreased the asset balance and increased net income

d. decreased the asset balance and decreased net income