Which of the Following Statements Is True

question 117

Multiple Choice

Which of the following statements is true?

• A)If revenues are less than expenses,the company has a net loss and retained earnings decreases.
• B)If revenues are greater than expenses,the company has net income and contributed capital increases.
• C)If revenues are less than expenses,the company has a net loss and contributed capital increases to balance off the loss.
• D)If revenues are greater than expenses,the company has net income and retained earnings decreases.

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Definitions:

Rationing Mechanism

A system or method used to distribute scarce goods or services among competing users.

Price Floor

A government- or authority-imposed minimum price that can be charged for goods and services, typically above the equilibrium price, to prevent prices from falling too low.

Surplus

A situation where the quantity supplied of a product exceeds the quantity demanded at a specific price.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition where there is no tendency for change.