-Refer to Exhibit 7-6

question 90

Multiple Choice

-Refer to Exhibit 7-6.Given the information provided in this table,did country ABC experience a recession during 2019 (based upon the standard definition of a recession) ?

• A) Yes,country ABC experienced a recession in 2019 since its GDP declined in two consecutive quarters.
• B) Yes,country ABC experienced a recession in 2019 since its GDP declined in three consecutive quarters.
• C) No,country ABC did not experience a recession in 2019 because its GDP did not decline four consecutive quarters.
• D) We cannot say whether or not country ABC is in a recession without knowing what its Real GDP was each quarter.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Unadjusted Trial Balance

A list of all the accounts and their balances from the general ledger before any adjusting entries are made.

Gross Profit

The difference between sales and the cost of goods sold.

Periodic Inventory Method

An accounting approach where inventory is physically counted at specific intervals to determine the cost of goods sold and ending inventory levels.