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31 January, 05:32

When farmers rent land in order to increase crop production, they are acquiring capital.

a. True

b. False

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Answers (1)
  1. 31 January, 05:46
    0
    b. False

    Explanation:

    It is false because the monthly rent is registered as an expense and the property of the land is not part of the farmers' assets. Remember that assets must fulfil 2 conditions in order to be considered assets: The company has the right of the use of the asset (in this case the farmers don't have the right, the pay for it), and the can received economic benefits from it.
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