Which of the Following Transactions Would Cause a Change in Owners

question 15

Multiple Choice

Which of the following transactions would cause a change in owners' equity?

• A)Repayment of the principal on a bank loan.
• B)Purchase of a delivery truck on credit.
• C)Sale of land on credit for a price above cost.
• D)Borrowing money from a bank.

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Definitions:

Significant Sunk Costs

Expenses that have already been incurred and cannot be recovered or changed.

Avoidable Cost

Costs that can be eliminated if a certain decision is made, not incurred if a particular activity is avoided.

Sunk Cost

A sunk cost is an expense that has already been incurred and cannot be recovered, often considered irrelevant for future business decisions.

Opportunity Cost

The cost of the next best alternative foregone as a result of making a decision.