For Most Firms, Economic Profit Is

question 156

Multiple Choice

For most firms, economic profit is:

• A) less than accounting profit.
• B) equal to accounting profit.
• C) greater than accounting profit.
• D) negative.

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Definitions:

Recorded By Credits

Transactions that increase liabilities, equity, or revenue, or decrease assets or expenses, reflected in the accounting records.

Increases

A rise in the value or quantity of something, such as assets, revenue, or profits.

Recorded By Debits

Transactions in accounting that increase assets or expenses and decrease liabilities, equity, and revenue, captured on the left side of an account.

Decreases

A reduction in the quantity, level, or intensity of something, such as expenses, assets, or liabilities.