Which of the Following Statements Is True

question 21

Multiple Choice

Which of the following statements is true?

• A)Whenever a firm raises its price its total revenue will increase.
• B)When a firm lowers its price its total revenue may either increase or decrease.
• C)Whenever a firm increases its quantity sold its revenue will increase.
• D)Total revenue will equal zero when the demand for a product is unit elastic.

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Definitions:

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid.

Income Taxes Payable

Liabilities owed to the government for income taxes, not yet paid by the company.

Income Tax Expense

The total amount of income tax a company is obligated to pay to the government, reported on its income statement.