Answer: Please Refer to Explanation
Explanation:
Please see complete question attached to this answer.
A.
As the company has not paid the salary but they recognize it is an expense, it should be credited to Salaries payable from the salary expense account.
DR Salary Expense $ 18,500
CR Salary Payable $18,500
( To record Salary Expense incurred but not paid)
B.
As the company has not paid the interest but they recognize it is an expense, it should be credited to Interest Payable from the interest expense account until it is paid.
DR Interest Expense $400
CR Interest Payable $400
( To record interest expense on loan not paid )
C.
As the company has not paid the mortgage interest but they recognize it is an expense, it should be credited to mortgage payable from the mortgage account expense account
DR Mortgage Interest Expense $1,025
CR Mortgage Interest Payable $1,025
( To recording interest expense on mortgage not paid for the year).
Answer:
diminishing marginal rates of substitution.
Explanation:
Based on the information provided within the question it can be said that the principle that captures this is known as diminishing marginal rates of substitution. Like mentioned in the question this refers to the fact that a consumer chooses to replace a product instead of actually buying more. This decreases as you move down the indifference curve as shown below.
