In General,during the Business Cycle,when Economic Activity Is Peaking

question 56

Multiple Choice

In general,during the business cycle,when economic activity is peaking:

• A)interest rates begin to creep higher
• B)unemployment levels are low
• C)inflation begins to edge higher
• D)all of the above
• E)not enough information to tell

Understand how liabilities affect the accounting equation.

Acknowledge the impact of owner withdrawals and investments on Owner's Equity.

Differentiate between assets that do and do not appear on the balance sheet.

Interpret the relationship between liabilities and Owner's Equity in determining financial health.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, based on the account type.

Temporary/Permanent

Categories used to distinguish between accounts that are closed at the end of an accounting period (temporary) and those that carry forward their balance into future periods (permanent).

Accrued Interest

Interest on loans or bonds that has accumulated but not yet been paid.

Note Receivable

An asset account representing amounts owed to a company by customers or others who have signed promissory notes in favor of the company.