You Read in the Newspaper That the Consumer Price Index

question 127

Multiple Choice

You read in the newspaper that the consumer price index in 2011 was 120. You conclude that a typical market basket in 2011 would have cost _____ more than the same market basket purchased in _____.

• A)20%; 2010
• B)120%; 2010
• C)20%; the base year
• D)120%; the base year

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Definitions:

Sales Journal

A specialized accounting journal that records all credit sales transactions of a business.

Subsidiary Ledger

A detailed ledger used to track individual transactions related to a specific account, complementing the general ledger.

General Ledger

The primary accounting record of all financial transactions of a company, organized by accounts, used to prepare financial statements.

Owner Withdraws

Transactions where the owner of a sole proprietorship takes out cash or other assets from the business for personal use.