The Double-Entry System

question 46

Multiple Choice

The double-entry system

• A)requires that each transaction be recorded with at least one debit and one credit.
• B)requires that the total amount of the debits must always equal the total amount of the credits.
• C)is based on the principle of duality.
• D)All of these choices.

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Definitions:

Marginal Cost

The rise in expense associated with manufacturing an extra unit of a product or service.

Shut Down

A short-term decision by a company to cease operations temporarily due to unfavorable market conditions or to minimize losses when variable costs exceed total revenues.

Maximizes Profit

The strategy or process implemented to increase the difference between total revenue and total costs to the highest possible amount.

Marginal Revenue

Income gained by selling an additional unit of a product or service.