If a Company Buys a $700 Machine on Credit, This

question 141

Multiple Choice

If a company buys a $700 machine on credit, this transaction will affect the

• A) income statement and retained earnings statement only.
• B) income statement only.
• C) income statement, retained earnings statement, and balance sheet.
• D) balance sheet only.

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Definitions:

Direction of Effort

The orientation or focus of an individual's or group's work and energies towards achieving a particular goal or task.

Motivation

The internal drive or external stimuli that prompt and direct behavior towards achieving personal or organizational goals.

Partial Reinforcement

Means rewarding a behavior only part of the time rather than all the time (it can be applied to punishment as well, but the reward case is simpler).

Punishment

Punishment involves applying a negative consequence or removing a positive reinforcement in response to undesired behaviour, with the aim of reducing or eliminating that behaviour.