Suppose Ms

question 88

Essay

Suppose Ms. Rich owns several gasoline stations. In Smalltown she owns the only station while in Biggington she owns one of several stations. Compare and contrast the price that Ms. Rich will charge at her stations.

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Definitions:

Debits

The left side of an accounting ledger where increases in expenses, assets, or decreases in liabilities and equities are recorded.

Credits

Entries in the accounting system that represent an increase in liabilities or equity or a reduction in assets, commonly associated with income and receipts.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts or funds obtained from special financing sources.

Normal Balance

The side of the accounting equation on which increases to an account are recorded, typically debit for assets and expenses, and credit for liabilities, equity, and revenue.