Which of the Following Statements Is Correct

question 75

Multiple Choice

Which of the following statements is correct?

• A) The cost of supplies used is reported on the statement of owner's equity.
• B) The cost of supplies used represents an operating expense of the business.
• C) Accumulated Depreciation--Equipment is presented in the Liabilities section of a balance sheet.
• D) At the time of their acquisition,prepaid expenses are recorded in expense accounts.

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Definitions:

Economic Income

The total value of all earnings over a period, including wages, salaries, bonuses, and any earnings from investments.

Net Worth

The total value of an individual's or organization's assets minus liabilities.

Consumption

The use of goods and services by households, considered as the end component of economic activity where goods or services are utilized.

Vertical Equity

A principle of taxation that posits taxpayers with higher incomes should pay more in taxes than those with lower incomes, based on the ability to pay.