The _____ Would Result in a Decrease in Net Income

question 117

Multiple Choice

The _____ would result in a decrease in net income under the cash basis, but it would not result in a decrease in net income under the accrual basis.

• A)purchase of inventory on account
• B)payment of two months of rent in advance
• C)expiration of prepaid rent
• D)recognition of depreciation expense

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Definitions:

Productivity

A measure of the efficiency of production, often calculated by dividing total output by the total inputs used in the production process.

Demand

The amount of a good or service that buyers are ready and capable of buying at different price levels over a given time frame.

Human Capital

The expertise, know-how, and practical experiences that a person or collective maintains, regarded in relation to their financial or worth importance to a business or country.

Nonhuman Capital

Resources or assets that are not human, such as machinery, buildings, and land, used in the production of goods and services.