Consider the Following Information About the Price and the Price

question 36

Multiple Choice

Consider the following information about the price and the price index of a popular book over three years. What was the price index for this book in 2010?

• A) 72
• B) 92.59
• C) 107.2
• D) 108

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Definitions:

Permanent Accounts

Accounts in the general ledger that are not closed at the end of an accounting year and whose balances are carried forward to the next year.

Balance Sheet Accounts

Accounts that report the financial position of a company, including assets, liabilities, and shareholders' equity, at a specific point in time.

Closing Process

The transfer process of converting temporary account balances to zero by transferring the revenue and expense account balances to the owner’s capital account, and transferring the owner’s drawing account balance to the owner’s capital account.

Drawing Account

An account used to track withdrawals made by the owner of a sole proprietorship from the business for personal use.