The Exit of Existing Firms from a Competitive Market Will

question 373

Multiple Choice

The exit of existing firms from a competitive market will

• A)increase market supply and increase market price.
• B)increase market supply and decrease market price.
• C)decrease market supply and increase market price.
• D)decrease market supply and decrease market price.

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Definitions:

Accounting Records

Documents and books that keep track of all financial transactions of a company, forming the basis for financial statements.

Adjusted Trial Balance

An adjusted trial balance is a list of all the accounts of a company, showing the balances after adjusting entries have been made for accruals, deferrals, and other adjustments.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances in temporary accounts to permanent accounts and to prepare the company's books for the next period.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.