Which of the Following Does NOT Occur as the Economy

question 24

Multiple Choice

Which of the following does NOT occur as the economy moves from an expansion to a recession?

• A) Incomes fall during recessions as firms cut production in response to unplanned increases in inventories.
• B) An initial decrease in autonomous spending is the trigger that creates the business cycle turning point.
• C) The multiplier process reinforces any decrease in spending and pushes the economy into recession.
• D) The change in planned spending exceeds the change in real GDP.

Recognize the appropriate interest calculation for notes receivable.

Understand the use of fair value measurement in financial reporting under IFRS and GAAP.

Differentiate between the accounting and reporting issues for receivables under IFRS and GAAP.

Understand how to journalize transactions related to notes receivable and calculate interest revenue.

---

Definitions:

Annual Rate

A percentage rate that represents the amount of interest or growth expected over the course of a year.

Balance of Payments Surplus

A situation in which the total amount of money coming into a country from abroad exceeds the total amount of money going out.

Monetary Inflow

The entry of money into a country, organization, or institution, typically influencing its financial health positively.

Monetary Outflow

This term refers to the flow of money out of a country, business, or institution, primarily through payments to other countries or purchases of goods and services.