Which of the Following Statements Is Correct

question 178

Multiple Choice

Which of the following statements is correct?

• A)When a future expense is paid in advance,the payment is normally recorded in a liability account called Prepaid Expense.
• B)Promises of future payment are called accounts payable.
• C)Increases and decreases in cash are always recorded in the retained earnings account.
• D)An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business.
• E)Liabilities include accounts receivable.

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, measuring the financial performance beyond the opportunity cost.

Commercial Real Estate

Property that is used solely for business purposes, which may be leased out to provide a workspace rather than a living space.

Peruvian Restaurant

An eating establishment that specializes in the cuisine of Peru, often featuring dishes like ceviche, lomo saltado, and aji de gallina.

Economic Profit

The distinction between overall income and total expenditures, encompassing both direct and indirect costs.