If a Transaction Causes an Asset Account to Decrease,which of the Following

question 25

Multiple Choice

If a transaction causes an asset account to decrease,which of the following related effects may occur?

• A)An increase of equal amount in an owners' equity account.
• B)An increase in a liability account.
• C)An increase of equal amount in another asset account.
• D)An increase in the combined total of liabilities and owners' equity.

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Definitions:

Fully Employs

The condition in which all available labor resources in an economy are being used in the most economically efficient way.

Full Employment

Full employment refers to a situation in the economy where all available labor resources are being used in the most efficient way possible, virtually eliminating involuntary unemployment.

Inefficient Outcome

A situation where resources are not allocated in the most valuable or productive way, often resulting from market failures or externalities.

Production Possibilities Frontier

A graphical representation that shows the combination of two goods that can be produced using all resources efficiently.