What Is the Effect on Account Balances When an Adjusting

question 93

Multiple Choice

What is the effect on account balances when an adjusting entry to record an unrecorded receivable is made?

• A) Both revenues and assets will be increased.
• B) Both revenues and assets will be decreased.
• C) Revenues will be increased, but assets will be decreased.
• D) Assets will be increased, but revenues will be decreased.

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Definitions:

Social Cost

The cost to society as a whole due to an activity, including both direct costs incurred and indirect effects (such as environmental damage or health impacts).

Marginal Cost

Marginal Cost is the additional cost incurred from producing one more unit of a good or service, an important concept in economics for decision-making regarding production levels.

Deadweight Loss

describes a loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is distorted by external factors like taxes or subsidies.

Demand Curve

represents the relationship between the price of a good and the quantity of that good consumers are willing to purchase.