If a Company Receives $12,000 from the Owner to Establish

question 223

Multiple Choice

If a company receives $12,000 from the owner to establish a proprietorship, the effect on the accounting equation would be:

• A) Liabilities increase $12,000 and equity decreases $12,000.
• B) Assets increase $12,000 and liabilities increase $12,000.
• C) Assets decrease $12,000 and equity decreases $12,000.
• D) Assets increase $12,000 and equity increases $12,000.
• E) Assets increase $12,000 and liabilities decrease $12,000.

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Definitions:

Indifference Curves

Graphical representations of different combinations of two goods between which a consumer is indifferent.

Indifference Curves

Charts that depict various bundles of goods between which a consumer is indifferent, showing preferences without implying utility levels.

Abundance

A situation where there is more than enough of a resource or commodity, often leading to lower prices or greater accessibility.

Trade Off

The concept of sacrificing one good or service in order to obtain another, often used in decision-making processes to weigh different options.