An Accountant Has Debited an Asset Account for $1,000 and Credited

question 31

Multiple Choice

An accountant has debited an asset account for $1,000 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

• A) Credit an asset account for $500.
• B) Credit another liability account for $500.
• C) Credit an equity account for $500.
• D) Debit an equity account for $500.

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Definitions:

Competitive Price-searcher Market

A market in which firms have some control over prices because their products are differentiated, but they still face competition and must search for competitive pricing strategies.

Zero Economic Profit

A situation where a firm's total revenue equals its total costs, including both explicit and implicit costs, indicating no supernormal profit.

Marginal Revenue

The additional income gained from selling one more unit of a good or service.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, a crucial concept for decision making in production and pricing strategies.