What Can We Say About APC + APS and MPC

question 337

Multiple Choice

What can we say about APC + APS and MPC + MPS?

• A) Each must sum to 1.
• B) MPC + MPS = 100% of total income.
• C) APC + APS = 100% of the change in income.
• D) MPC + MPS always equals 1, but the sum of APC + APS can vary.

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Definitions:

Fiscal Year

A one-year period used for financial reporting and budgeting, which may not align with the calendar year.

Net Income

Represents the total profit of a company after all expenses and taxes have been subtracted from total revenue.

Insurance Policy

A contract between an insurer and a policyholder stipulating the terms under which the insurer agrees to compensate the insured for specific losses.

Adjusting Entry

An accounting entry made into a journal at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.