Figure 6-10 -Refer to Figure 6-10.A Price Floor Set at

question 174

Multiple Choice

Figure 6-10
-Refer to Figure 6-10.A price floor set at

• A)$6 will be binding and will result in a surplus of 10 units.
• B)$6 will be binding and will result in a surplus of 6 units.
• C)$16 will be binding and will result in a surplus of 10 units.
• D)$16 will be binding and will result in a surplus of 4 units.

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Definitions:

Known Liabilities

Obligations that are quantifiable, and the company is aware of, including debts and other financial responsibilities that appear on the balance sheet.

Employee Earnings Report

A detailed record that shows the amount of money an employee has earned over a particular period, including wages, bonuses, and deductions.

Gross Earnings

The total amount of money earned by an individual or organization before any deductions are made.

Contingent Liabilities

Contingent liabilities are potential liabilities that may occur depending on the outcome of a future event, and are recorded in the company's financial statements if probable and estimable.