Which of the Following Is Not Investment Spending

question 5

Multiple Choice

Which of the following is not investment spending?

• A)an increase in business inventories
• B)the extensive renovation of an old factory building
• C)the purchase of stock in Potomac Electric Company
• D)the construction of a new apartment building
• E)the purchase of a new silo for a farm

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Definitions:

Income Summary

An account used to summarize the revenue and expenses for a specific period, aiding in the transition to the next accounting period.

Net Loss

The amount by which total expenses exceed total revenues in a given period, indicating a financial loss.

Net Income

A company's total earnings post the subtraction of all expenses, taxes, and costs from its overall revenue.

Owner's Capital

This represents the total equity invested by the owners in a company plus any retained earnings, indicative of the net worth of the company from the owner's perspective.