-The Above Figure Plots Income and Consumption in a Nation

question 309

Multiple Choice

-The above figure plots income and consumption in a nation. In 2007

• A) consumption was equal to $25,000 and income was equal to $28,000.
• B) consumption was equal to $28,000 and income was equal to $25,000.
• C) consumption was equal to $25,000 and income was equal to $25,000.
• D) consumption was equal to $27,000 and income was equal to $31,000.

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Definitions:

Sales Revenue

The income earned by a company from its sales of goods or services before any expenses are deducted.

Matching Principle

An accounting principle that requires companies to report expenses at the same time as the revenues they are related to, ensuring that financial statements accurately reflect business performance.

Recorded

Documented in official records or accounts.

Periodic Inventory System

A method of inventory valuation where the ending inventory and cost of goods sold are determined at the end of an accounting period.