What Is the Correct Order of Events in a Typical

question 25

Multiple Choice

What is the correct order of events in a typical business cycle?

• A)Prosperity,recession,depression,and recovery
• B)Depression,recovery,recession,and prosperity
• C)Recovery,depression,prosperity,and recession
• D)Recession,recovery,prosperity,and depression

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Definitions:

Permanent/Temporary

Terms used to differentiate between accounts that remain open over fiscal periods (permanent) and those closed at the end of a period (temporary).

Normal Balance

The side of an account (debit or credit) on which increases in the account are recorded, depending on the account type.

Financial Statement

Reports that provide an overview of a company's financial condition at a specific time, including income statement, balance sheet, and cash flow statement.

Permanent/Temporary

Refers to the two broad categories of accounts in accounting: permanent accounts track long-term financial activity, whereas temporary accounts are closed at the end of each accounting period.