The Amount of Owners' Equity in a Business Is Not

question 128

Multiple Choice

The amount of owners' equity in a business is not affected by:

• A)The percentage of total assets held in cash.
• B)The investments made in the business by the owner.
• C)The profitability of the business.
• D)The amount of dividends paid to stockholders.

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Definitions:

Office Equipment Depreciation

The process of allocating the cost of office equipment over its useful life, recognizing it as an expense on financial statements.

Direct Costs

Expenses that can be directly traced to the production of specific goods or services.

Indirect Costs

Expenses that are not directly tied to the production of goods or services, such as overhead, administration, and salaries.

Salespersons' Salaries

Fixed or variable payments made to sales staff as compensation for their services, typically involving a base salary and possibly commissions.