An Important Rule to Remember When Analyzing the Impact of Business

question 93

Multiple Choice

An important rule to remember when analyzing the impact of business transactions on accounts is:

• A) net income increases stockholders' equity.
• B) if expenses exceed revenues, the company will have a net income.
• C) a net loss does not affect stockholders' equity.
• D) stockholders' equity includes the two categories of income statement accounts, revenues and liabilities.

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Definitions:

Economic Necessity

A situation where financial considerations compel a particular course of action, indicating that certain decisions are driven by economic rather than preferential factors.

Employment Opportunities

Available jobs or positions in the labor market that individuals can apply for in order to earn income.

Poverty Rate

The percentage of the population living below the national poverty line, indicating the proportion of individuals or families whose income falls short of the defined threshold for basic living costs.

Blue-collar Jobs

Occupations that typically involve manual labor or skilled trade tasks.