A Student Has a D Grade Average in Her Accounting

question 36

Multiple Choice

A student has a D grade average in her accounting course and a B grade average in her economics course.She decides to study an extra hour for her accounting exam and one less hour for her economics exam,hoping to improve her accounting grade while not hurting her economics grade.This is an example of

• A) thinking at the margin.
• B) using assumptions to simplify.
• C) ceteris paribus.
• D) caveat emptor.

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Definitions:

Accrual Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is received or paid.

Proprietary Fund Types

Types of funds used by governmental entities to account for activities similar to those found in the private sector, where the intent is to recover costs through user charges.

Internal Service Funds

Funds used by a government entity to account for the services provided by one department to other departments on a cost-reimbursement basis.

Enterprise Funds

Governmental accounting funds used to account for operations financed and operated in a manner similar to private business enterprises, where the intent is that the costs are financed primarily through user charges.