Conner Sales' Total Assets and Total Liabilities Increased $3,400

question 25

Multiple Choice

Conner Sales' total assets and total liabilities increased $3,400. The transaction could have been:

• A) purchase of supplies for cash, $3,400.
• B) purchase of supplies for $3,700 with a down payment of $300 and the remainder on account.
• C) paid the rent for the month, $3,400.
• D) None of these answers is correct.

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Definitions:

Fixed Costs

Overheads like rent, salaries, and insurance that stay the same, irrespective of how much is produced or sold.

Break-Even

The point at which total costs equal total revenues, resulting in no net loss or gain for a business.

Variable Cost

Costs that vary directly with the level of production or volume of output.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, providing a basis for operational planning.