Relatively Rapid U

question 6

Multiple Choice

Relatively rapid U.S. growth between 2002 and 2007 contributed to large U.S. trade deficits by

• A)increasing U.S. national income, which decreased U.S. exports.
• B)reducing real interest rates in the United States.
• C)increasing U.S. tax revenues and reducing the federal budget deficit.
• D)increasing U.S. national income, which increased U.S. imports.

---

Definitions:

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Unrelated Year-end Adjustments

Adjustments made to the financial statements at year-end that do not pertain to the normal operations of the business.

Prepaid Insurance

An asset account representing payments made for insurance coverage before the coverage period.

Accrued Salaries

Salaries that have been incurred but not yet paid; an expense that represents the amount of salary earned by employees but not disbursed by the end of the accounting period.