Which of the Following Is True About Index Numbers? Index

question 39

Multiple Choice

Which of the following is true about index numbers? Index numbers are:

• A) used to measure the trend component.
• B) used to measure the seasonal component.
• C) used to measure the cyclical component.
• D) used to make a relative comparison of different time periods.

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Definitions:

Asset

An economic resource owned or controlled by an individual or corporation, expected to provide future benefits.

Liability

Economic responsibilities or liabilities an organization has to other parties, which require repayment over a period via the exchange of economic assets.

Equity

The value of an owner's interest in a property or business, calculated by subtracting liabilities from assets.

Debits

Entries on the left-hand side of an account that represent the increase in assets or expenses or a decrease in liabilities, equity, or income.