For the Following Transaction, Identify the Type of Change That

question 20

Multiple Choice

For the following transaction, identify the type of change that would have occurred in the accounting equation: Assets = Liabilities + Share capital + Opening retained profits + Revenue - Expenses - Dividends
A payment was made to accounts payable.

• A) A liability increased and another liability decreased.
• B) An asset decreased and a liability decreased.
• C) An asset increased and revenue increased.
• D) An asset decreased and an expense increased.

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Definitions:

Returns to Scale

The change in output as a result of proportionately changing all inputs in the production process, indicating increasing, constant, or decreasing returns.

Marginal Cost

An uplift in the sum total of costs incurred by producing another unit of a product or service.

Average Fixed Cost

The fixed costs of production (such as rent and salaries) divided by the number of goods produced; it decreases as output increases.

Mixers

Devices or software used for blending different audio signals together, often used in music production, live performances, and broadcasting.