A Firm Has Just Ended the Calendar Year Making a Sale

Multiple Choice

A firm has just ended the calendar year making a sale in the amount of $200,000 of merchandise purchased during the year at a total cost of $150,500. Although the firm paid in full for the merchandise during the year, it has yet to collect at year end from the customer. One possible problem this firm may face is ________.

A) low profitability
B) insolvency
C) inability to receive credit
D) high leverage