In an Informal Economy ________

question 32

Multiple Choice

In an informal economy ________.

• A) market value of all officially recognized final goods and services produced within a country is substantially lowered
• B) economic transactions are not officially recorded and are therefore left out of national GDP calculations
• C) exchange rates are low
• D) the household income is substantially larger than that in a formal economy

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Definitions:

Adjusting Entries

Journal entries made in accounting to update the records for revenues and expenses that have accrued but not yet been recorded through standard accounting transactions.

Prepaid Expenses

Costs paid in advance of their use, such as insurance or rent, which are recorded as assets on a balance sheet until they are actually incurred.

Recorded

The process of documenting financial transactions in the accounting records of a business.

Adjusted Trial Balance

A trial balance taken after adjustments have been made, used for preparing financial statements.