Suppose an Increase in the Price of Rubber Coincides with an Advance

question 18

Multiple Choice

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production.As a result of these two events,the demand for tires

• A)decreases,and the supply of tires increases.
• B)is unaffected,and the supply of tires decreases.
• C)is unaffected,and the supply of tires increases.
• D)None of the above is necessarily correct.

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Definitions:

Purchases On Account

The acquisition of goods or services with an agreement to pay for them at a later date, typically through the use of credit.

Accounts Receivable Subsidiary Ledger

A ledger containing detailed information on transactions related to individual customers to whom sales on credit have been made.

Collections From Customers

The process and activities involved in gathering all payments owed by customers for goods and services sold to them.

Adjustment For Expired Insurance

This is an accounting entry made to reflect the decrease in value of an insurance premium, representing the portion of the insurance cost that has been utilized over time.