The Respective Normal Account Balances of Unearned Revenue, Inventory, and Cost

question 84

Multiple Choice

The respective normal account balances of Unearned Revenue, Inventory, and Cost of Goods Sold are

• A) credit, credit, credit.
• B) debit, credit, debit.
• C) credit, debit, debit.
• D) credit, debit, credit.

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Definitions:

Production Possibility

Represents various combinations of amounts of two or more goods or services that can be produced within a given time period, with a given amount of resources, and with technology constraints.

Capital

Capital refers to financial assets or the financial value of assets, such as funds held in deposit accounts as well as the physical factors of production.

Opportunity Cost

The value of the best alternative that is forgone when a choice is made between several mutually exclusive alternatives.

Bowed Outward

Describes a curve (such as in production possibilities frontier) that shows increasing opportunity costs for producing two goods.