Mark Paid $300 Cash to Partially Reduce the Amount Owed

question 62

Multiple Choice

Mark paid $300 cash to partially reduce the amount owed for equipment that was previously bought on account. This transaction would:

• A) increase both Assets and Liabilities.
• B) increase Assets and decrease Liabilities.
• C) decrease both Assets and Liabilities.
• D) decrease Assets and increase Liabilities.

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Definitions:

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific segment or department within a company.

Net Operating Income

Net operating income reflects a company’s financial performance by showing profit calculated from its core business operations, excluding taxes and interest expenses.

Price Reduction

A decrease in the selling price of a product or service, often used as a strategy to increase demand or sales volume.

Traceable Fixed Expense

A fixed cost that can be directly associated with a specific business segment or area, and which would disappear if the segment was eliminated.