If a Firm Finds That It Has a Larger Stock

question 115

Multiple Choice

If a firm finds that it has a larger stock of inventory at the end of the period than it had at the start,the difference would be:

• A)counted as investment.
• B)subtracted from total GDP.
• C)counted as consumption on the assumption that it will eventually be sold.
• D)counted as net exports.
• E)indeterminate.

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Definitions:

Fair Values

An estimation of the market value of an asset or liability, based on current prices in an active market or through model-based techniques when no active market exists.

Journal Entry

A record of a business transaction in an accounting system that includes the accounts and amounts to be debited and credited.

Acquisition

The process of acquiring control of another company or business asset, which can involve a purchase, merger, or take-over.

Assets

Resources owned or controlled by a person or company, expected to produce economic value or future benefits.