The Equation of Exchange Indicates That
A) $M Q \text { equals } V P \text {. }$

question 53

Multiple Choice

The equation of exchange indicates that

• A) \(M Q \text { equals } V P \text {. }\)
• B) the velocity of money and the supply of money vary proportionately with one another.
• C) other things being equal, an increase in V will increase \(P \text { and/or } Q \text {. }\)
• D) other things being equal, M and P are inversely related.

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Definitions:

Prepaid Rent

Payments made in advance for rent on a property or space that is to be used in the future, recorded as an asset on the balance sheet until the period to which the payment applies passes.

Sales Revenue

The total income a company generates from selling its goods or services before any costs or expenses are subtracted.

Wage Expense

The total amount spent by a business on salaries and wages for its employees.

Post-Closing Trial Balance

A list of all accounts and their balances after closing entries are made, showing only balance sheet accounts.