Figure 16.5.1 -Use the Following Statements to Answer This Question. I. There

question 7

Multiple Choice

Figure 16.5.1
-Use the following statements to answer this question. I. There are potential gains from trade when the economies of two countries differ so that one country has an absolute advantage in producing one good, while the second country has an absolute advantage in producing another good.
II) A country has an absolute advantage in producing a good if its cost is lower than the cost in another country.

• A) Both I and II are true.
• B) I is true, and II is false.
• C) I is false, and II is true.
• D) Both I and II are false.

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Definitions:

Post-closing Trial Balance

A financial statement prepared after closing entries are made, listing all the account balances to check the equality of debits and credits.

Accounting Cycle

The accounting process that begins with analyzing and journalizing transactions and ends with the post-closing trial balance.

Financial Statements

Formal records that convey the business activities and financial performance of a company, including balance sheet, income statement, and cash flow statement.

Closing Entries

These are journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts.