In the Circular-Flow Diagram

question 113

Multiple Choice

In the circular-flow diagram,

• A)firms own the factors of production.
• B)the factors of production are labor,land,and capital.
• C)the factors of production are also called "output."
• D)All of the above are correct.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was acquired, reflecting its usage and wear and tear over time.

Tax Purposes

Considerations or actions undertaken in accounting or financial planning to minimize tax liabilities and comply with tax laws.

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.

Accounting Standards

Agreed-upon principles that govern the reporting and preparation of financial statements, ensuring consistency and comparability across entities.