Which of the Following Is a Normative Statement

question 266

Multiple Choice

Which of the following is a normative statement?

• A) An increase in consumer income will lead to increased sales of beef.
• B) A decrease in the rate of unemployment will lead to upward pressure on consumer prices.
• C) An increase in the income tax will cause a greater reduction in savings than an increase in the sales tax.
• D) An economy with high unemployment can be worse off than an economy with high inflation.

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Definitions:

Completed-Contract Method

An accounting technique where revenue and expenses of a long-term contract are recorded only when the project is completed.

Construction In Progress

An accounting term for the financial balance of construction costs attributed to assets under construction that have not yet been completed.

Realization

The process of converting non-cash assets into cash or recognizing revenue when goods or services are delivered, generating measurable income.

Noncash Resources

Assets or resources that do not have a direct cash value or cannot be easily converted to cash, such as goodwill, patents, and trademarks.