Sugar City Uses the Purchases Method to Record All Prepayments

question 23

Multiple Choice

Sugar City uses the purchases method to record all prepayments.The city has a 6/30 fiscal year-end.On 12/31/14, the city purchased a three-year insurance policy covering all city owned vehicles acquired by the general fund to be used in general government activities.Cost of the policy was $360,000.After the 6/30/15 closing entries, the appropriate balance sheet accounts and balances in the city's general fund associated with this transaction are

• A)Prepaid insurance $300,000; Expenditures $60,000.
• B)Prepaid insurance $300,000; Expenditures $360,000
• C)Prepaid insurance $0; Expenditures $360,000.
• D)Prepaid insurance $0; Expenditures $60,000.

Recognize external factors influencing demand elasticity, including taxes and substitutes

Understand the concept of elasticity in economics, including its mathematical representation and factors affecting it.

Identify and differentiate between perfectly elastic and perfectly inelastic demand and supply.

Analyze the effects of price changes on demand and supply elasticity, including the impact of taxes.

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