Which of the Following Is the Correct Treatment on the Worksheet

question 2

Multiple Choice

Which of the following is the correct treatment on the worksheet for the nominated item?

• A) GST payable account, credit the income statement and credit the balance sheet.
• B) Depreciation account, debit the balance sheet and credit the adjustments.
• C) Cash at bank account, credit the adjustments and debit the balance sheet.
• D) Profit earned, debit the income statement and credit the balance sheet.

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Definitions:

Income Elasticity

A measure of how the demand for a good or service changes with a change in consumers' income.

Normal Good

A type of good for which demand increases when consumer income rises, and decreases when consumer income decreases.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite to normal goods.

Income Elasticity

A measure of how much the demand for a good or service changes with a change in consumers' income, indicating the nature of the good as either a necessity or a luxury.