Decreases in Equity Are Caused By

question 46

Multiple Choice

Decreases in equity are caused by:

• A) Purchases of assets and payment of liabilities.
• B) Purchases of assets and incurrence of liabilities.
• C) Payment of liabilities and unprofitable operations.
• D) Distributions of assets to the owner and unprofitable operations.

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Definitions:

Tariff

A tax imposed on imported goods and services to regulate trade, increase government revenue, or protect domestic industries.

Consumer Surplus

The variance between the sum consumers are inclined and can afford to pay for a good or service and the sum they genuinely pay.

Producer Surplus

Producer surplus is the difference between what producers are willing to sell a good for and the actual price they receive.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from the trading of goods or services.