Nobells Corp

question 142

Multiple Choice

Nobells Corp.has acquired land and paid $500 as brokerage to acquire the land.However,the company's accountant has recorded the $500 as a revenue expenditure.What is the effect of this error?

• A)Net income is understated by $500.
• B)Liabilities are overstated by $500.
• C)Revenue is overstated by $500.
• D)Assets are overstated by $500.

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Definitions:

Domestic Investment

The total spending on capital within a country, including spending on new buildings, machinery, and inventory changes.

Real GDP

A measure of the value of all goods and services produced by an economy adjusted for price changes or inflation.

Foreign Investment

The investment of capital by individuals, corporations, or governments from one country into business interests within another country.

Standard Of Living

The standard of living refers to the level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.