Which of the Following Transactions Will Cause Both the Left

question 50

Multiple Choice

Which of the following transactions will cause both the left and right side of the accounting equation to decrease?

• A)Collecting cash from a customer who owed us money.
• B)Paying a supplier for inventory we previously purchased on account.
• C)Borrowing money from a bank.
• D)Purchasing equipment using cash.

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Definitions:

Opportunity Cost

The forgone value of what you give up when you make a choice.

Total Output

The aggregate quantity of goods and services produced within an economy over a specific period, reflecting the economy's overall productivity.

Comparative Advantage

The ability of an entity to produce a good or offer a service at a lower opportunity cost than another.

Absolute Advantage

The ability of a country to produce a good at a lower cost than its trading partners.