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

question 41

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: Depreciation expense was recorded for the year.
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:

Law of Diminishing Returns

A principle stating that as one factor of production is increased while others are held constant, there comes a point at which the marginal gain in output begins to decrease.

Long Run

A period in which all factors of production and costs are variable, allowing for complete adjustment to changes.

Commercial Aircraft

Airplanes designed specifically for carrying passengers and/or cargo for commercial airlines.

Ready-Mix Concrete

Concrete that is manufactured in a factory or batching plant, according to a set recipe, and then delivered to a worksite by truck mounted in–transit mixers.