Identify the Statement Below That Is Correct

question 32

Multiple Choice

Identify the statement below that is correct.

• A)When a future expense is paid in advance,the payment is normally recorded in a liability account called Prepaid Expense.
• B)Promises of future payment by the customer are called accounts receivable.
• C)Increases and decreases in cash are always recorded in the common stock account.
• D)An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business.
• E)Accrued liabilities include accounts receivable.

---

Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, where individuals substitute away from more expensive goods towards cheaper ones.

Marginal Utility

The added satisfaction or usefulness received from consuming one more unit of a good or service.

Total Utility

The total satisfaction received from consuming a certain amount or combination of goods and services.

Money Income

The total amount of monetary earnings or receipts received by an individual or household from various sources before taxes.