-If Our Economy Was Operating at Point O (Where the Two

question 40

Multiple Choice

-If our economy was operating at point O (where the two axes come together) ,we would have an unemployment rate of ______ percent.

• A)0
• B)5
• C)50
• D)95
• E)100

Differentiate between the periodic and perpetual inventory systems and understand the impact on accounting records.

Describe the operating cycle for a merchandiser with credit sales.

Identify and explain the terms FOB shipping point and FOB destination and their impact on inventory accounting.

Understand and prepare closing entries for a merchandising company and how they differ from those of a service company.

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Definitions:

Price Level

Denotes the average of current prices across the entire spectrum of goods and services produced in the economy.

Skimming Pricing

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product.

Highest Initial Price

A pricing strategy where a new product is introduced to the market at a high price before possibly lowering it later based on demand and competition.

Innovative Product

A new or significantly improved product that introduces a novel feature or fulfills a specific need in a new way.