An Expectation May Fail to Be Rational If

question 7

Multiple Choice

An expectation may fail to be rational if

• A)relevant information was not available at the time the forecast is made.
• B)relevant information is available but ignored at the time the forecast is made.
• C)information changes after the forecast is made.
• D)information was available to insiders only.

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Definitions:

Statement of Income

A financial report summarizing the revenues, expenses, and profits/losses of a company over a specified period, also known as an income statement.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, used to prepare financial statements.

Accrued Salaries

Salaries that have been earned by employees but have not yet been paid by the company, often recorded as a liability on the balance sheet.

Services Paid

Expenses related to services that have been paid for by a company or individual.