When Demand Is Inelastic

question 58

Multiple Choice

When demand is inelastic

• A)The percentage change in price is greater than the percentage change in quantity demanded.
• B)Buyers are very sensitive to changes in price.
• C)The product in demand has many substitute goods.

Recognize the correct treatment of prepaid expenses and unearned revenues in accounting entries.

Understand the impact of cash and accrual transactions on the financial statements.

Know the differentiation between the cash basis and accrual basis of accounting, including the implications for financial reporting.

Apply the expense recognition (matching) principle to determine when expenses should be recognized in the income statement.

---

Definitions:

Creative Way

An innovative or original approach to solving problems or generating new ideas.

Save Bank

A strategy or plan to conserve financial resources or prevent financial collapse.

Laying Anyone Off

The process of terminating employees due to business reasons such as cost-cutting, downsizing, or restructuring, rather than individual performance issues.

Facilitate Style

An approach or method in leadership or management that emphasizes enabling and supporting participants or team members to achieve their goals.