When a Business Purchases Land with a Note Payable

question 138

Multiple Choice

When a business purchases land with a note payable:

• A)both assets and stockholders' equity are increased.
• B)assets are decreased and stockholder's equity is increased.
• C)both assets and liabilities are increased.
• D)assets are increased and liabilities are decreased.

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Definitions:

Production Function

A mathematical model describing the relationship between the inputs used in production and the resulting output of goods or services.

Returns To Scale

The change in output as a result of a proportional change in all input factors in the production process.

Marginal Product

The additional output resulting from the use of one more unit of a production factor, holding other factors constant.

Factor X

An unspecified or unknown factor that can influence outcomes in an economic model or analysis.