A Debit to a Liability Account Was Posted as a Debit

question 1

Multiple Choice

A debit to a liability account was posted as a debit to a revenue account.This error would cause:

• A)revenues to be understated.
• B)liabilities to be understated.
• C)revenue to be overstated.
• D)None of the above is correct.

Recognize how firm decisions are influenced by cost behavior in the short run.

Understand the concept of economic profit and normal profit and how they differ from accounting profit.

Grasp the significance of optimal plant size and its dependence on expected output levels.

Appreciate the economic rationale behind the cost structures of firms and the implications for resource allocation.

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Definitions:

Returns

The profit or loss derived from an investment, often expressed as a percentage of the investment amount.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price.

Dividend Income

Income received from owning shares in a corporation, usually in the form of cash payments made to investors out of the company's profits.

Shares

Equity stakes in a corporation, representing a portion of the ownership, which entitle the holder to a share of the company's profits and assets.