If It Is Cheaper in the Long Run to Use

question 249

Multiple Choice

If it is cheaper in the long run to use a new metal plow that lasts a long time than an inferior wooden plow that needs to be replaced often, then this is an example of

• A)a capital-using technology.
• B)a capital-saving technology.
• C)capital consumption.
• D)private capital flows.

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Definitions:

Adjustment

Modifications made to account balances in order to correct financial statements or to allocate transactions correctly.

Accrual Accounting

An accounting method that recognizes revenue and expenses when they are incurred, not necessarily when cash is exchanged, enhancing the accuracy of financial statements.

Financial Statements

Formal records of the financial activities and position of a business, organization, or person, including balance sheets, income statements, and cash flow statements.

Adjusting Entries

Journal entries made in accounting to update the accounts and bring them to their correct balances before the preparation of financial statements.