When a Business Purchases a $25,000 Computer System by Writing

question 26

Multiple Choice

When a business purchases a $25,000 computer system by writing a check, the business's balance sheet will:

• A) show an increase in assets and liabilities of $25,000.
• B) only show an increase in assets of $25,000.
• C) only show an increase in liabilities of $25,000.
• D) still show the same total amount of assets as before the purchase.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Price Elasticity

The degree to which the demand for a product is affected by price fluctuations, reflecting the price sensitivity of buyers.

Price-Elasticity-Of-Demand

A measure of how much the quantity demanded of a good responds to a change in its price, with elasticity greater than one indicating that demand is responsive to price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified period.