If Dana Can Paint His House Faster Than Luke, a Professional

question 79

Multiple Choice

If Dana can paint his house faster than Luke, a professional house painter, then:

• A) Dana has a comparative advantage in house painting.
• B) Dana has an absolute advantage in house painting.
• C) Luke has a comparative advantage in house painting.
• D) Luke has an absolute advantage in house painting.
• E) Dana should always paint his own house.

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Definitions:

Adjusting Entries

Bookkeeping entries recorded at the close of a fiscal period to assign earnings and outlays to the timeframe in which they happened.

Adjusting Entries

Accounting records created during a period's close to distribute revenues and expenses to their rightful temporal occurrences.

Cash

Money in the form of currency that can include bank notes and coins, available for transactions or savings.

Income Summary

The Income Summary is an account where revenues and expenses are compiled to show the net result of a company's operations for a particular period.