Which of the Following Is Not a Possible Effect on the Accounting

question 32

Multiple Choice

Which of the following is not a possible effect on the accounting equation from a single transaction of $1000?

• A) Assets increase by $1000; Equity increases by $1000.
• B) Assets decrease by $1000; Liabilities decrease by $1000.
• C) Liabilities increase by $1000; Liabilities decrease by $1000.
• D) Liabilities decrease by $1000; Equity decreases by $1000.

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Definitions:

Activity-based Approach

A methodological approach that focuses on identifying and managing activities as the fundamental cost objects, aiming to improve business processes and allocate costs more precisely.

Job Costing Approach

A system used to assign manufacturing costs to an individual product or batches of products, commonly used in industries where products are distinct like construction or custom manufacturing.

Selling Price Per Unit

The amount charged to the customer for a single unit of product or service.

Contribution Margin

A financial metric that represents the difference between a company's sales revenue and variable costs, used to cover fixed costs and profits.