The Basic Accounting Concepts and Principles

question 31

Multiple Choice

The basic accounting concepts and principles:

• A)explain the difference between managerial and financial accounting.
• B)provide financial information about the reporting entity that is useful to existing and potential investors,lenders and other creditors in making decisions about providing resources to the entity.
• C)are an important way in which management discharges its accountability to investors and other outside users.
• D)provide a structure for helping us to judge whether specific rules and methods for calculating and reporting accounting information are consistent with each other.

Describe how price controls affect consumer welfare and market efficiency.

Understand the rationales behind imposing and removing price controls.

Evaluate the impact of supply and demand changes under different price controls.

Analyze the historical context and effects of specific price controls, such as those on gasoline.

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Definitions:

Customer

An individual or entity that purchases goods or services from a business.

Sales Returns and Allowances

Concessions made to customers for returned merchandise or unsatisfactory goods, reducing sales revenue.

Office Supplies

Items used in offices for daily operations and tasks, including stationery, pens, paper, and other small equipment, often classified as current assets in accounting.

Net Sales

The total revenue from sales of goods or services, after deducting returns, allowances for damaged or missing goods, and any discounts given.