Use the Rule of 72 to Determine How Long It

question 55

Multiple Choice

Use the rule of 72 to determine how long it takes for real GDP to double if real GDP grows at 3% per year.

• A) 12 years
• B) 24 years
• C) 36 years
• D) 72 years

---

Definitions:

Deferral

A future revenue or expense initially recorded as a liability or asset.

Prepaid Rent

An expense that is paid in advance for the use of property or equipment, recognized over the period of usage.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenses to the periods in which they actually occurred.

Rent Expense

The cost incurred by a business to utilize property or equipment for operational purposes, recognized as an expense on the income statement.