-The Figure Shows Two Lorenz Curves

question 253

Multiple Choice

-The figure shows two Lorenz curves. Suppose both Lorenz curves measure income. Lorenz curve A shows ________ Lorenz curve B.

• A) income is more equally distributed than the income shown in
• B) income is less equally distributed than the income shown in
• C) the first quintile earns less income than the first quintile earned in
• D) the fifth quintile earns more income than the fifth quintile earned in

Understand the necessity and preparation of adjusting and closing entries before the production of financial statements.

Recognize the difference between cash and accrual basis of accounting and their implications on financial statements.

Identify the purpose and timing of revenue recognition in accordance with accrual accounting.

Understand the requirements and justifications for making adjusting entries in the accounting cycle.

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Definitions:

Sales Tax

A tax imposed by governments on the sale of goods and services, collected by the retailer at the point of sale and passed on to the government.

Cash Refund

A repayment to a customer in cash for the return of products or for rebate claims.

General Journal

A primary accounting record used to record all non-specific financial transactions of a business in chronological order.

Sales Tax

A consumption tax imposed by the government on the sale of goods and services, collected by the retailer at the point of sale.