If a Transaction Is Properly Analyzed and Recorded

question 13

Multiple Choice

If a transaction is properly analyzed and recorded,

• A) only two accounts will be used to record the transaction.
• B) one account balance will increase and another will decrease.
• C) one asset account will be debited and one liability account will be credited.
• D) the total dollar amount debited will equal the total dollar amount credited.

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Definitions:

Economic Profits

The difference between total revenue earned from production and the total opportunity costs of all inputs used in the production process.

Long-Run Equilibrium

A state in which economic forces such as supply and demand are balanced over the long term, with all factors of production and markets adjusting fully to any changes.

Long-Run Cost Curve

A graphical representation that shows the minimum cost at which different quantities of output can be produced in the long run, highlighting economies and diseconomies of scale.

Industry Supply Curve

A graphical representation showing the relationship between the price of a good and the total output supplied by all firms in the industry.