Sam Buys Petrol and Coffee Each Week

question 35

Multiple Choice

Sam buys petrol and coffee each week. In order to draw his budget line between petrol and coffee, Sam would have to know

• A) only the prices of one litre of petrol and one kilogram of coffee.
• B) only how much income he has available to spend on petrol and coffee.
• C) only how much petrol he wants to buy and how much coffee he wants to drink.
• D) both how much income he has to spend and the prices of one litre of petrol and one kilogram of coffee.

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Definitions:

Other Income

Comprises earnings from sources other than the main business activities, such as interest, dividends, or rental income.

Accounts Payable

Money owed by a company to its creditors for goods and services purchased on credit.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those shown on a bank statement to ensure they align.

Balance Per Books

The ending balance on a company's financial records for a specific account, before any adjustments for reconciliation.