Desired Level of the Capital Stock

question 9

Multiple Choice

Desired Level of the Capital Stock
-Consider the two graphs above.Suppose that allowable deductions from taxable business income are increased.This would ________ the desired level of the capital stock,as depicted in graph ________.

• A)increase;B
• B)increase;A
• C)decrease;B
• D)decrease;A

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Definitions:

Trial Balance

A worksheet for accounting purposes that gathers all ledger account balances into credit and debit columns to confirm that a company's financial records are mathematically precise.

Assets

Resources owned or controlled by a business, expected to bring future economic benefits.

Capital

It refers to financial assets or the financial value of assets, such as funds held in deposit accounts and/or funds obtained from special financing sources.

Revenue

The total income generated from normal business operations, including sales of products and services before any expenses are subtracted.