Sale of an Asset at a Loss Will Affect Which

question 86

Multiple Choice

Sale of an asset at a loss will affect which activities?

• A) Operating activity will have the loss added to profit; investing will increase for the proceeds on the sale.
• B) Operating activity will have the loss subtracted from profit; investing activities will increase for the proceeds on the sale.
• C) Operating activity will have the loss added to profit; financing activities will increase for the proceeds on the sale.
• D) Operating activity will have the loss subtracted to profit; financing activities will increase for the proceeds on the sale.

---

Definitions:

Marginal Product

The extra output generated from using an additional unit of a specific input, while keeping all other inputs unchanged.

Production Function

A mathematical model relating the quantity of output produced to the quantities of inputs used.

Bakery

A bakery is a business establishment that produces and sells flour-based food baked in an oven, such as bread, cookies, cakes, pastries, and pies.

Average Product

The output per unit of input, calculated by dividing total product (output) by the number of units of the input.