The Graph Shown Portrays a Subsidy to Buyers

question 21

Multiple Choice

The graph shown portrays a subsidy to buyers. The subsidy causes _______ units to be sold in this market.

• A) 50 more
• B) 150 more
• C) 100 fewer
• D) 50 fewer

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Definitions:

Deferral

Accounting method to postpone the recognition of revenues or expenses until a future accounting period.

Journal Entry

A record in the accounting ledger that represents a transaction and its effect on various accounts, used for tracking and organizing financial data.

Accrual

Accrual is an accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction actually takes place.

Adjusting Journal Entry

An accounting entry made in the general ledger at the end of an accounting period to record any unrecognized income or expenses for the period.