Figure 3-20 -Refer to Figure 3-20. If the Price Decreases from $22

question 63

Multiple Choice

Figure 3-20
-Refer to Figure 3-20. If the price decreases from $22 to $16, consumer surplus increases by

• A) $120.
• B) $360.
• C) $480.
• D) $600.

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Definitions:

Income Summary

An account used during the closing process that summarizes revenues and expenses for a specific accounting period before the net income or loss is transferred to retained earnings.

Inventory

Items meant for sale during regular business operations, currently being produced for that purpose, or intended as materials to be used in manufacturing.

Periodic System

An inventory system where inventory records are updated at specific intervals, as opposed to continuously.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company.