Bond Company Experienced an Accounting Event That Affected Its Financial

question 5

Multiple Choice

Bond Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Bond's financial statements?

• A) paid a cash dividend
• B) earned cash revenue
• C) borrowed money from a bank
• D) none of these

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Definitions:

Real Output

Measures the quantity of goods and services produced, adjusted for inflation, to reflect the actual physical output.

Diminishing Returns

Diminishing returns is an economic principle stating that as more investments or resources are added to a production process, the incremental gain in output will eventually decrease if all other factors remain constant.

Disguised Unemployment

Situations where more people are employed in a task or job than is necessary for its completion, leading to inefficiency.

Capital Goods

Long-term assets such as buildings, machinery, and equipment purchased by businesses to produce goods and services.