In Order to Be Classified as a Recession,a Contraction of General

question 126

Multiple Choice

In order to be classified as a recession,a contraction of general economic activity must last at least

• A)one year.
• B)six months.
• C)one period.
• D)one quarter.
• E)None of the above because recessions do not have a minimum length.

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Definitions:

Credit Sales

Sales for which payment is not received at the time of the transaction but is expected to be received at a later date.

Finished Goods Inventory

Products that are completed and ready for sale but have not yet been sold to customers.

Required Production

The amount of product that must be produced in a specified period to meet customer demand and inventory policy.

Cash Collections

The process of gathering and accounting for all cash received by a business during a specific period of time.