Which of the Following Is NOT an Example of the Productivity

question 19

Multiple Choice

Which of the following is NOT an example of the productivity shock?

• A)an increase in oil price because of oil supply disruption that came after a political turmoil in a major oil-exporting country
• B)severe weather that caused an adverse effect on farming
• C)development of new software that allows firms to keep track of their services
• D)a 2 percent rise in nominal wages

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Definitions:

Net Realizable Value

The estimated selling price in the ordinary course of business, minus the estimated costs of completion and the costs necessary to make the sale.

Bad Debt Expense

A provision for accounts receivable that are considered unlikely to be collected.

Percentage of Credit Sales

An accounting method used to estimate bad debts expense by applying a fixed percentage to the total credit sales of a period.

Allowance Account

An accounting reserve established to adjust the carrying value of accounts receivable to their net realizable value, recognizing potential losses from uncollectible accounts.