Adjusting Entries Affect

question 98

Multiple Choice

Adjusting entries affect:

• A)only balance sheet accounts.
• B)only income statement accounts.
• C)only statement of cash flow accounts.
• D)both income statement and balance sheet accounts.

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Definitions:

Demand for Leisure

The desire for free time in which one can enjoy personal activities outside of work.

Labor Supply Curve

A graphical illustration of the relationship between the wage rate and the quantity of labor workers are willing to supply at various wage rates.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Income Effect

The change in consumers' purchasing power and consequently the quantity demanded of a good or service, prompted by a change in real income.