The Purchase of an Asset for Cash

question 48

Multiple Choice

The purchase of an asset for cash

• A) increases assets and shareholders' equity.
• B) increases assets and liabilities.
• C) decreases assets and increases liabilities.
• D) leaves total assets unchanged.

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Definitions:

Inelastic

A characteristic of a good or service whose demand or supply is relatively unresponsive to changes in price.

Elastic

A characteristic of a product or service that indicates its demand or supply significantly changes with a change in price.

Unit Elasticity

A situation where a change in the price of a product leads to a proportional change in the quantity demanded or supplied.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.