If $9,600 Cash and a $31,000 Note Payable Are Given

question 92

Multiple Choice

If $9,600 cash and a $31,000 note payable are given in exchange for some office machines to be used in a business:

• A) Total assets are increased.
• B) Total liabilities are decreased.
• C) Total assets are decreased.
• D) The equity is increased.

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Definitions:

Variable Cost

Expenses that change in proportion to the level of production or business activity.

Negotiation

A strategic discussion that resolves an issue in a way that both parties find acceptable, often used in business to finalize deals, terms, and prices.

Investment Turnover

A metric assessing how effectively a firm turns asset investments into revenue.

Profit Margin

A financial ratio that shows what percentage of sales has turned into profits, essentially capturing the level of profitability of a company.