When a Company Purchases an Asset but Only Pays for a Portion

question 71

Multiple Choice

When a company purchases an asset but only pays for a portion of it and owes the remainder,which of the following is true?

• A)The asset is debited for the amount paid plus the amount owed.
• B)The asset is debited for the amount paid.The amount owed will be debited to the asset once paid.
• C)The asset is credited for the amount paid plus the amount owed.
• D)The asset is credited for the amount paid.The amount owed will be debited to the asset once paid.

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Definitions:

Marginal Product

The additional output generated by employing one more unit of a certain input, such as labor or capital.

VMPL

The Value of Marginal Product of Labor, which is the additional value created by employing one more unit of labor.

Profit-maximizing

The process by which a firm determines the price and output level that generates the most profit.

MR

Marginal Revenue, which is the extra revenue that an organization receives from selling one more unit of a product.