-Refer to the Above Figure

question 168

Multiple Choice

-Refer to the above figure. Line BCD is called

• A) the saving function.
• B) the savings function.
• C) the 45-degree line.
• D) the consumption function.

---

Definitions:

FASB

The Financial Accounting Standards Board, the organization responsible for establishing and improving financial accounting standards in the United States.

Present Value Approach

A method to determine the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Installment Sales Method

An accounting method that recognizes revenue when payments are actually received rather than at the point of sale.

Accrual Method

A bookkeeping approach that registers revenues and costs as they are accrued or realized, irrespective of the timing of the associated cash transactions.