Which of the Following Best Describes Inventory Item Linked Accounts

question 2

Multiple Choice

Which of the following best describes inventory item linked accounts -

• A) when you purchase the item, the asset account is debited
• B) when you sell the item, the revenue account is credited
• C) when you sell the item, the cost of goods sold account is debited
• D) all of the above

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given point in time, often depicted as a point on a demand curve.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, usually to protect consumers.

Price Floor

A government or regulatory minimum price that must be paid for a good or service, intended to prevent prices from falling too low.

Shortage

A market condition where demand exceeds supply.