A Newspaper Typically Consumes a Smaller Fraction of a Consumer's

question 65

Multiple Choice

A newspaper typically consumes a smaller fraction of a consumer's budget than a home entertainment system.Therefore, you would expect the demand for:

• A) a home entertainment system to be more price elastic.
• B) a home entertainment system to be more price inelastic.
• C) newspapers to be more price elastic.
• D) both to be equally price elastic.

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Definitions:

Retained Earnings

The amount of net income left over for a business after it has paid out dividends to its shareholders.

Journalizing

Journalizing is the process of recording transactions in the accounting journals as part of the double-entry bookkeeping system.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, ultimately resetting the temporary accounts for the new fiscal period.

Post-closing Trial Balance

A statement created after closing entries are made, listing all active accounts and their balances to ensure debits equal credits.