Blecker Corp

question 67

Multiple Choice

Blecker Corp.made cash sales to customers.What effect does this transaction have on the accounting equation?

• A)Liabilities increase and stockholders' equity increases.
• B)There is no effect on the accounting equation as one asset account increases while another asset account decreases.
• C)Assets increase and liabilities increase.
• D)Assets increase and stockholders' equity increases.

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, used to cover fixed costs and generate profits.

Gross Margin

Gross Margin is the difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage. It indicates the percentage of revenue that exceeds the cost of goods sold.

Special Order

A special order refers to a one-time order that is not part of the regular, ongoing business operations and usually requires consideration of additional costs and pricing.