A Purchase of a Vehicle for Cash Would Have What

question 46

Multiple Choice

A purchase of a vehicle for cash would have what affect on the accounting equation?

• A) Total asset amount remains the same.
• B) Total liabilities are overstated.
• C) Total owner's equity is overstated.
• D) Both A and B are correct.

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Definitions:

Sole Proprietorship

A company that is both owned and run by one person, where the law does not separate the owner from the entity itself.

Profits Taxed Twice

Describes circumstances where corporate profits are taxed at the business level and then taxed again when distributed as dividends to shareholders.

Multinational Corporations

Companies that operate in multiple countries, managing production or delivering services in more than one country.

Small Retail Businesses

Small-scale retail outlets that sell goods or services to consumers, often characterized by independent ownership and operation.