Figure 2-5 -Consider Figure 2-5 Above.A Small Family Owns Gelato Business in Business

question 195

Multiple Choice

Figure 2-5
-Consider Figure 2-5 above.A small family owns gelato business in the town's favorite place where parents and children stop on their way home from work to relax or school to play.However,the business owner is barely making ends meet.The adults who stop by are always complimenting him on his unusual gelato flavor selections.He decides to experiment by packaging his special spices into small packets that can be used at home as flavorings for dinner drinks.Profits begin to rise.This is an example of a __________ strategy that would be found in quadrant __________.

• A) market penetration; "A"
• B) product development; "B"
• C) market development; "C"
• D) diversification; "D"
• E) product-market addition; "D"

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Definitions:

Temporary Accounts

Accounts used to collect revenues, expenses, and dividends information which are then transferred to permanent accounts at the end of the accounting period.

Closed

Refers to an account or period that has been concluded and no longer accepts entries or transactions.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is exchanged.

Adjusting Entries

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.