Economic Events That Affect an Entity's Accounting Equation,but That Are

question 125

Multiple Choice

Economic events that affect an entity's accounting equation,but that are not transactions between the entity and outside parties are called:

• A) Internal transactions.
• B) Liabilities.
• C) Source documents.
• D) External transactions.
• E) Prepaid expenses.

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Definitions:

Expenditures

The act of spending or disbursing money, often related to business operations, investments, or personal consumption.

Business Revenue

The income that a business receives from its normal business activities, usually from the sale of goods and services to customers.

Profit Income

The financial earnings exceeding the costs of production, often considered the reward for business risks.

Command System

An economic system where government decisions determine resource allocation and production choices.