What Effect Does This Journal Entry Have on the Accounts

question 29

Multiple Choice

What effect does this journal entry have on the accounts?

• A)Increase to Cash and increase to Land
• B)Increase to Land and decrease to Cash
• C)Decrease to Cash and decrease to Land
• D)Increase to Cash and decrease to Land

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Definitions:

Monopoly Profits

Excess profits earned by a monopoly as a result of having exclusive control over a market and the ability to set higher prices.

Profit-Maximizing

The method or plan of altering manufacturing and sales activities to maximize profit.

Marginal Cost

The expense incurred from manufacturing an extra single unit of a service or product.

Monopolist

A monopolist is a market participant who has exclusive control over the supply of a particular good or service, setting prices with minimal competition.