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NEW QUESTION 49
A cafe located near a university used to only sell one type of coffee for $1.50 a cup. It decided to start selling a new premium cup for $2.50 while still keeping its standard coffee at $1.50. What recent event might have prompted this new product offering?

• A. The expansion of the university, displacing office buildings in the neighborhood
• B. An increase in the cafe's rent
• C. The university announcing decreased enrollment numbers for next year
• D. The opening of a large and expensive apartment complex close to the cafe

Answer: D

NEW QUESTION 50
A company believes a "low-cost" strategy would help increase revenues. The company lowers the price of its product but actually sees a decrease in revenues. What information could explain this result?

• A. The market is in an economic boom.
• B. The demand for the product is relatively inelastic.
• C. The company's product is not perceived as a necessity.
• D. The company failed to cut costs significantly.

Answer: B

NEW QUESTION 51
Company A owns properties that it leases for use as plant and office space. Company A received $120,000 on June 25 from Company B as a lease payment for use of a building for six months beginning July 1. What entry would Company A make on July 31?

• A. Debit deferred revenue for $20,000 and credit rent revenue for $20,000
• B. Debit prepaid rent $100,000 and credit accrued rent $100,000
• C. Debit cash for $120,000 and credit deferred revenue for $120,000
• D. Debit rent revenue for $20,000 and credit deferred revenue $20,000

Answer: A

NEW QUESTION 52
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