In Double Entry Bookkeeping, a Trial Balance Is Prepared

question 5

Multiple Choice

In double entry bookkeeping, a trial balance is prepared. The expected result is ____.

• A) a cash account balance of zero
• B) that cash and expense accounts have equal balances
• C) that credit accounts and debit accounts have equal totals
• D) that the assets and liabilities have equal totals

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Definitions:

Autarky

A situation in which a country does not trade with other countries.

Comparative Advantage

The advantage conferred on an individual or country in producing a good or service if the opportunity cost of producing the good or service is lower for that individual or country than for other producers.

Absolute Advantage

The advantage conferred on an individual or country in an activity if the individual or country can do it better than others. A country with an absolute advantage can produce more output per worker than other countries.

Ricardian Advantage

A theory in economics that suggests countries should specialize in producing and exporting goods in which they have a relative productivity advantage.