[The Following Information Applies to the Questions Displayed Below

question 42

Multiple Choice

[The following information applies to the questions displayed below.]
The bank statement for Tetra Company contained the following items: a bank service charge of $10; a credit memo for interest earned, $15; and a $50 NSF check from a customer. The company had outstanding checks of $100 and a deposit in transit of $300.
-Which of the following will be caused by recording the customer's NSF check?

• A) Accounts receivable increases.
• B) Cash decreases.
• C) stockholders' equity decreases.
• D) Accounts receivable increases and cash decreases.

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Definitions:

Income Elasticity

The ratio of the percentage change in the quantity demanded of a good to the percentage change in consumer income, used to measure how changes in income affect demand.

Negative

Typically associated with undesirable outcomes or attributes, indicating a deficit or reduction.

Good A

A hypothetical or generic product or service that is used as an example in economic theories or problems.

Price-Inelastic

A scenario where the demand for a good or service is relatively unchanged when the price varies.