Suppose That the Consumer Price Index for a Particular Economy

question 86

Multiple Choice

Suppose that the Consumer Price Index for a particular economy rose from 110 to 120 in year 1, 120 to 130 in year 2, and 130 to 140 in year 3.We could conclude that this economy is experiencing

• A)accelerating inflation.
• B)deflation.
• C)disinflation.
• D)a constant rate of inflation.

---

Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts.

Unearned Rent

Income received by a landlord for rent that has been paid in advance, which is considered a liability until the period it pertains to occurs.

Income Summary

Income Summary is an account to which all income statement accounts are transferred at the end of an accounting period to calculate the net profit or loss.

General Ledger

The main accounting record of a company that uses double-entry bookkeeping, containing all the financial accounts and statements.