If a store sells a good at the market price, even though the government authorities have set the minimum price that can be charg
1 answer:
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Answer:
31 Dec Expense A/c Dr. $5,400
To Prepaid Expense A/c $5,400
(Therefore, expense for the current financial year recorded)
Explanation:
We know that at the time of insurance paid in advance on 1 April for 2 years, entry was;
Prepaid Insurance A/c Dr. $14,400
To Cash A/c $14,400
Now at year end the expense relating to current period shall be recognized properly in the books, so that matching principle of revenue against expenses shall be matched.
Thus, period from 1 April to 31 December = 9 months
Expense for 9 months =
That means expense for the year = $5,400
Therefore, entry for such recording will be:
31 Dec Expense A/c Dr. $5,400
To Prepaid Expense A/c $5,400
(Therefore, expense for the current financial year recorded)
Answer:
The correct answer is option c.
Explanation:
A decrease in the supply will cause the supply curve to shift to the left. This leftward shift in the supply curve will further cause the demand and supply curve to intersect at a higher point.
As a result, there will be an increase in the equilibrium price and a decrease in the equilibrium quantity.
This also represented in the figure given below.
