Sao Paulo Company Performed Services on Account for R$160,000

question 46

Multiple Choice

Sao Paulo Company performed services on account for R$160,000.This transaction will

• A)increase assets and liabilities by R$160,000.
• B)increase assets and equity by R$160,000.
• C)increase liabilities and equity by R$160,000.
• D)have no effect on the accounting equation.

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Definitions:

Producer Net Gains

The total benefits or earnings that producers receive from selling goods or services, over and above their costs of production.

Marginal Revenue

The additional income derived from selling one more unit of a good or service.

Lerner Index

A measure of a firm's market power, calculated as the difference between price and marginal cost divided by price.

Elastic

Describes demand that is highly sensitive to changes in price, meaning that quantity demanded can significantly increase or decrease as prices change.