In Part,a Transaction Affects the Accounting Equation as Follows: Which

question 77

Multiple Choice

In part,a transaction affects the accounting equation as follows: Which of the following must be true for this transaction to keep the accounting equation in balance?

• A)If other assets remain the same,shareholders' equity must increase.
• B)If other assets remain the same,shareholders' equity must decrease.
• C)If shareholders' equity remains the same,another asset must decrease.
• D)If shareholders' equity remains the same,all other assets must remain the same.

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Definitions:

Direct Labor Hours

Total working hours logged by employees who are intimately involved with the production operations.

Profitable Use

The utilization of resources or assets in a manner that generates a significant positive return or profit.

Insufficient Capacity

A situation where a company does not have enough resources, such as manpower or machinery, to meet current or future production demands.

Contribution Margin

The difference between sales revenue and variable costs, indicating the amount contributing to covering fixed costs and profit.