Refer to the Graph Shown

question 23

Multiple Choice

Refer to the graph shown. With an effective price floor at P_f, the effect is an implicit tax on:

• A) suppliers shown by area C and a subsidy to consumers of that area.
• B) suppliers shown by area B and a subsidy to consumers of that area.
• C) consumers shown by area C and a subsidy to suppliers of that area.
• D) consumers shown by area B and a subsidy to suppliers of that area.

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Definitions:

Accounts Payable

Liabilities of a business that represent money owed to suppliers or creditors for goods and services received.

Accounts Payable Subsidiary Ledger

A detailed record used to track amounts owed to suppliers or creditors separate from the general ledger.

General Ledger

A comprehensive ledger that contains all the financial accounts of a business, recording every transaction that occurs.

Accounts Receivable Subsidiary Ledger

A detailed ledger that tracks individual transactions with customers, supporting the summary balances shown in the main accounts receivable account.