If There Are No Drawings and No Contributions of Capital,a

question 42

Multiple Choice

If there are no drawings and no contributions of capital,a profit could be earned in any accounting period if and only if:

• A)Total assets exceed total liabilities
• B)Total assets increase during the period
• C)Total liabilities increase during the period
• D)Net assets increase during the period

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Definitions:

Endowment

The initial allocation of income, goods, or resources that individuals or firms possess in an economy, often impacting their trading capabilities and outcomes in markets.

Price

The amount of money required to purchase a good or service, reflecting its value in a market economy.

Endowment

The total resources available to an individual or entity, including income, assets, and wealth.

Consumption

The process by which goods and services are used up by consumers, reflecting a part of the economy concerned with spending on final goods and services.