Whitefish Inc

question 42

Multiple Choice

Whitefish Inc.bought a building worth $750,000.They paid $150,000 in cash and borrowed the remainder from a bank.What is the effect of this transaction on the accounting equation?

• A)Assets increases by $750,000 and liabilities increases by $750,000.
• B)Assets increases by $750,000 and liabilities increases by $660,000.
• C)Assets increases by $600,000 and liabilities increases by $750,000.
• D)Assets increases by $600,000 and liabilities increases by $600,000.
• Both assets and liabilities increased by $600,000 ($750,000 - $150,000)

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Definitions:

Elasticity Coefficient

A numeric value that measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Buyer Responsiveness

The degree to which consumers adjust their demand for a product or service in response to changes in price or other factors.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Inelastic

Pertains to a scenario where the need for a product or service shows little reaction to fluctuations in its price.