What Is the Effect on the Statement of Financial Position

question 14

Multiple Choice

What is the effect on the statement of financial position when the business buys inventory on credit?

• A)Increase asset inventory; increase liability creditor.
• B)Increase asset inventory; increase equity.
• C)Decrease asset inventory; decrease liability creditor.
• D)Decrease asset inventory; increase liability creditor.

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Definitions:

Standard Costs

Predetermined costs of manufacturing a single unit of product, used for budgeting and performance evaluation.