At March 1, I

question 63

Multiple Choice

At March 1, I.Repo Inc.reported a balance in Supplies of $200.During March, the company purchased supplies for $950 and consumed supplies of $800.If no adjusting entry is made for supplies:

• A)stockholders' equity will be overstated by $800.
• B)expenses will be understated by $950.
• C)assets will be understated by $350.
• D)net income will be understated by $800.

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Definitions:

Interest Rate

A financial term denoting the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Equilibrium Interest Rate

The interest rate at which the demand for loanable funds equals the supply of loanable funds, balancing savings and investment in the economy.

Total Spending

The sum of all expenditures made by consumers, businesses, and the government within an economy over a specific period.

Riskier Loans

Loans that carry a higher chance of default compared to standard loans, often resulting in higher interest rates to compensate for the increased risk.