When Target Has a Sale on Bed Linens

question 58

Multiple Choice

When Target has a sale on bed linens,

• A)consumers will not demand more than normal.
• B)the store will not supply more linens than it normally does.
• C)consumers will demand more linens.
• D)the manufacturer will halt production.
• E)consumers will demand less linens than normal.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Capital Expenditures

Money spent by a firm on buying or improving hard assets such as land, factories, or equipment.

Revenue Expenditures

Expenses that are immediately charged against revenues in the same accounting period, generally related to the maintenance and repair of fixed assets or operating expenses.

Accounting System

A methodical procedure of recording, measuring, and communicating financial information for decision making in business.