Which of the Following Entries Would Be Made as the Result

question 114

Multiple Choice

Which of the following entries would be made as the result of the revenue principle?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Service revenue } & 1,000 & \\
• \hline \text { Service revenue } & & 1,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts receivable } & 1,000 & \\
• \hline \text { Service revenue } & & 1,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Salary expense } & 1,000 & \\
• \hline \text { Accounts payable } & & 1,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Depreciation expense } & 1,000 & \\
• \hline \text { Accumulated depreciation } & & 1,000 \\
• \hline
• \end{array}\]

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good that buyers are willing to purchase at various prices.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of output.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and differentiated competition.

Excess Capacity

The failure to produce enough to minimize average total cost; characteristic of monopolistically competitive firms.