"Smitty's Hot Boiled Peanuts" Recently Reported That Its Revenue Increased

question 129

Multiple Choice

"Smitty's Hot Boiled Peanuts" recently reported that its revenue increased from the previous quarter,along with its profits.What is the most likely explanation for this change,if the only change Smitty's made was in its price?

• A)Price decreased and demand was inelastic.
• B)Price increased and demand was inelastic.
• C)Demand was unit elastic.
• D)Price decreased and demand was elastic.

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Definitions:

Promises To Pay

Agreements or commitments by a debtor to pay a specific amount by a certain date to a creditor.

Direct Write-off Method

A method of accounting for bad debts that involves charging unpaid invoices directly to the expense account when they are determined to be uncollectible.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and record them as an expense.

Bad Debts

Money owed to a company that is considered irrecoverable and is written off as a loss.