Two Competing Advertising Agencies Provide Similar Services,but Record Sales Using

question 90

Essay

Two competing advertising agencies provide similar services,but record sales using different methods.
1.Diversified Advertising records sales and sales taxes in separate accounts.For the month of March,sales total $10,000 and sales taxes are $600.
2.Centralized Advertising records sales and sales taxes together.For the month of March,sales total $5,300,including a 6% sales tax.
Record sales revenue and the related sales tax payable for (1)Diversified Advertising and (2)Centralized Advertising.

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Definitions:

Income Elasticity

A measure of how much the demand for a product changes in response to a change in consumers' income.

Quantity Demanded

The overall volume of a commodity or service that individuals are prepared and financially able to buy at a certain price.

Education

The process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs, and habits through methods like teaching, training, storytelling, discussion, and directed research.

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in its price.