What Is the Result If the Amount of Net Income

question 96

Multiple Choice

What is the result if the amount of Net Income for the year is less than the amount of the Owner's Withdrawals?

• A)Owner's Name, Capital increases
• B)Cash balance decreases
• C)Cash balance increases
• D)Owner's Name, Capital decreases

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Definitions:

Marginal Cost

The increase in total cost that arises when the quantity produced is incremented by one unit.

Profit-maximizing Rule

The principle that firms maximize their profits by producing at a level where marginal costs equal marginal revenues.

Marginal Revenue

The increased earnings a business obtains from the sale of one extra item or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product.