Because Every Transaction Has a Buyer and a Seller

question 226

Multiple Choice

Because every transaction has a buyer and a seller,

• A)GDP is more closely associated with an economy's income than it is with an economy's expenditure.
• B)every transaction contributes equally to an economy's income and to its expenditure.
• C)the number of firms must be equal to the number of households in a simple circular-flow diagram.
• D)firms' profits are necessarily zero in a simple circular-flow diagram.

---

Definitions:

Unearned Rent Revenue

Income received for rent that has been paid in advance by a tenant but not yet earned by the landlord.

Wages Payable

Wages payable is a liability account that records the amounts owed to employees for work that has been performed but not yet paid.

Capital Lease Contracts

Lease agreements that transfer substantially all risks and rewards of ownership from the lessor to the lessee, effectively treated as a purchase.

Computer Software

Computer Software encompasses programs and operating information used by a computer, directing how the hardware processes data and performs tasks.