Note: This Is a Kaplan CPA Review Question

question 18

Multiple Choice

Note: This is a Kaplan CPA Review Question
Elm City issued a purchase order for supplies with an estimated cost of $5,000. When the supplies were received, the accompanying invoice indicated an actual price of $4,950. What amount should Elm debit (credit) to the budgetary fund balance account after the supplies and invoice were received?

• A) $4,950
• B) ($50)
• C) $50
• D) $5,000

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Definitions:

Marginal Product

The additional output resulting from the use of one more unit of a production input, holding other inputs constant.

Factor Market

A marketplace for the services of a factor of production, such as labor, capital, or land, essential for production processes.

Equilibrium Value

The price or value at which the quantity supplied is equal to the quantity demanded in a market.

Marginal Productivity

The increase in output resulting from a one-unit increase in the input, holding all other inputs constant.