If Firms' Inventories Are Increasing Above Their Target Level, Then

question 47

Multiple Choice

If firms' inventories are increasing above their target level, then

• A) actual consumption expenditure is greater than planned consumption expenditure.
• B) actual investment exceeds planned investment.
• C) real GDP will increase.
• D) real GDP will not change in the foreseeable future.

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Definitions:

Accrued Salaries

Salaries that have been incurred but not yet paid, representing a liability for the company.

Closing Entries

Entries recorded at the close of an accounting period to move balances from temporary to permanent accounts.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries are made, used to prepare financial statements and ensure the ledger accounts are balanced.

Current Assets

Assets that a company expects to convert to cash or use up within one year or the operating cycle, whichever is longer.