Journal Entries Show the Effects of Transactions on the Elements

question 155

True/False

Journal entries show the effects of transactions on the elements of the accounting equation,as well as the account balances.

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Definitions:

Variable Costs

Expenditures that adjust based on the quantity of production or the scale of sales.

Utility Rates

Charges imposed by utility companies for the use of services such as electricity, gas, water, and sewer.

Contribution Margin

The amount by which the sale of a product or service exceeds its variable costs, used to cover fixed costs and contribute to net income.

Fixed Costs

Expenses that do not change with the level of production or sales over a relevant period, such as rent, salaries, and insurance.