The Transactions Listed in the Following Questions Occurred in a Private,not-For-Profit

question 89

Multiple Choice

The transactions listed in the following questions occurred in a private,not-for-profit hospital during 20X8.For each transaction,indicate its effect on the hospital's statement of operations for the year ended December 31,20X8.
-Transaction: A gain was realized from the sale of endowment investments.The gain is not expendable.
Effect on Statement of Operations:

• A)Increases operating income.
• B)Decreases operating income.
• C)The transaction is reported on the statement of operations,but there is no effect on operating income.
• D)The transaction is not reported on the statement of operations.

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Definitions:

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, each having some market power.

Economic Profits

The extra amount businesses earn after subtracting all of their costs, including opportunity costs.

Long Run

A period in which all factors of production and costs are variable, allowing for all adjustments to be made within a market or economy.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on quality, brand, and price.