If a Company Has Excess Space in Its Building That

question 35

Multiple Choice

If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation during the first month?

• A) Liabilities would decrease $700 and equity would increase $700.
• B) Assets would increase $700 and equity would increase $700.
• C) Assets would decrease $700 and equity would increase $700.
• D) Assets would increase $700 and equity would decrease $700.
• E) Assets would decrease $700 and liabilities would decrease $700.

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Definitions:

Content Validity Ratio

A statistical measure used to estimate the extent to which a test represents all facets of a given construct.

Construct

An abstract concept or theoretical entity that is used to explain and predict behavior in psychology and other social sciences.

Criterion-Related Validity

A measure of the degree to which a test or instrument reflects a certain set of abilities applicable to the real world.

Criterion Performance

A specific standard or benchmark that individuals must meet or exceed in a performance context, often used in assessments or evaluations.