Under the Accrual Basis, Some Accounts in the Ledger Require

question 154

Essay

Under the accrual basis, some accounts in the ledger require updating at the end of the period. Discuss the three main reasons for this updating and give an example of each.

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Definitions:

Supply Curve

A graph showing the relationship between the price of a good and the quantity of that good that suppliers are willing to produce and sell.

Price Elasticity

A measure indicating the extent to which the demand for a merchandise changes following a price adjustment.

Short Run

A period in economics during which at least one input is fixed and cannot be changed by the firm.

Long Run

A period in which all factors of production and costs are variable and companies can enter or exit an industry.