According to the Accelerator Principle There Is a _____ Relationship

question 14

Multiple Choice

According to the accelerator principle there is a _____ relationship between _____ and planned investment spending.

• A) positive; expected growth
• B) negative; expected growth
• C) positive; unplanned inventory investment
• D) positive; the interest rate

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Definitions:

General Ledger Account

A comprehensive set of accounts that provides a complete record of all financial transactions of a company.

Allowance Method

An accounting technique used to estimate and account for potential uncollectable debts or credit sales.

Uncollectible Receivables

Debts owed to a company that are considered unlikely to be paid by the debtor, often written off as bad debts.

Bad Debts Expense

Bad debts expense is the cost to a business of accounts receivable that are not collected because customers are unable to pay.