Which of the Following Statements Is NOT True

question 31

Multiple Choice

Which of the following statements is NOT true?

• A) If total assets decreased by $30 000 during the period and shareholders' equity decreased by $20 000, liabilities decreased by $10 000 for the period.
• B) If total assets decreased by $50 000 during the period and shareholders' equity decreased by $30 000, liabilities decreased by $80 000 for the period.
• C) If the total assets owned by a company were $80 000 and shareholders' equity totalled $35 000 for the period, liabilities are $45 000.
• D) If total assets increased by $45 000 for the period and liabilities decreased by $20 000, shareholders' equity increased by $65 000.

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Definitions:

Variable Cost

A cost that changes in proportion to the level of output or activity in a company.

Fixed Cost

Costs that remain constant in total, regardless of changes in the level of production or sales volume, such as rent, salaries, and insurance.

Budgeted Fixed Expenses

Estimated costs that do not change with the level of activity within a certain range and time period.

Inventory Purchases

The total cost of buying raw materials and goods for sale during a specific accounting period.