At Equilibrium Expenditure, Unplanned Changes in Inventory

question 75

Multiple Choice

At equilibrium expenditure, unplanned changes in inventory

• A) must be positive.
• B) must be zero.
• C) must be negative.
• D) might be either positive or negative.

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Definitions:

Accounting Period

A specific period of time used by businesses for accounting purposes to prepare financial statements, commonly a year or a quarter.

Cash Account

A ledger account that tracks all cash transactions, including receipts and payments.

Overdrawn Bank Balance

This occurs when withdrawals from a bank account exceed the available balance, resulting in a negative balance.

Journal Entry

A record in the books of accounts that represents a business transaction and its effect on the company's financial position.