If Firms' Unplanned Inventories Are Increasing, Then in a Closed

question 92

Multiple Choice

If firms' unplanned inventories are increasing, then in a closed, private economy

• A) the level of real national income will rise.
• B) the level of real national income will not change in the foreseeable future.
• C) actual consumption is greater than planned consumption.
• D) consumers are saving more than businesses anticipated.

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Definitions:

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.

Cash Basis

A method of accounting where revenue and expenses are recognized only when cash is received or paid, respectively.

T-account

A visual representation used in accounting to depict the debit and credit sides of accounts, helping in the preparation and understanding of double-entry accounting systems.

Discontinued Operations

Components of a business that have been sold or otherwise disposed of, or that are classified as held for sale, with their results reported separately in financial statements.