Which of the Following Statements Is Correct

question 77

Multiple Choice

Which of the following statements is correct?

• A) When an insurance premium is paid in advance, the payment is normally recorded in a liability account called Prepaid Insurance.
• B) Goods and services are commonly sold to customers on the basis of oral or implied promises of future payment, called promissory notes.
• C) Increases and decreases in cash are always recorded in the equity account.
• D) An account called Land is commonly used to record increases and decreases in the land and buildings owned by a business.
• E) None of these statements are correct.

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Definitions:

Perfect Information

A market condition where all participants have access to all necessary information to make informed decisions.

Stackelberg Duopoly

A market structure where two firms compete with one another with one firm establishing itself as a leader by setting its output or price first, and the other firm acting as a follower.

Nash Equilibrium

An idea in game theory where a player cannot gain an advantage by altering their strategy if the strategies of other players stay the same.

Leader Firms

Companies that dominate a particular market or industry, often setting trends and standards for others to follow.