Exhibit 3-6 -Refer to Exhibit 3-6.If an Increase in Income Causes the in Income

question 198

Multiple Choice

Exhibit 3-6

-Refer to Exhibit 3-6.If an increase in income causes the demand for good X to shift from D? to D?,then good X is

• A) a normal good.
• B) an inferior good.
• C) a substitute good.
• D) a complementary good.
• E) a neutral good.

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Definitions:

Ledger

A comprehensive collection of accounts that records all financial transactions of a business, categorized for reporting and analysis purposes.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts and prepare the company’s books for the next period.

Financial Statements

Reports that summarize the financial performance, position, and cash flows of a business over a specific period of time, including the balance sheet, income statement, and statement of cash flows.