Suppose a Farmer Sells a Bushel of Wheat to a Miller

question 323

Multiple Choice

Suppose a farmer sells a bushel of wheat to a miller for $1;the miller makes it into flour and sells it to a baker for $2;the baker turns it into bread and sells it to a customer for $3.Calculating GDP the contribution of transactions would be

• A)$1.00.
• B)$2.00.
• C)$3.00.
• D)$6.00.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate periods, ensuring that revenues and expenses are matched.

Accumulated Depreciation

The complete value of a physical asset's price that has been charged as an expense from the time the asset started being utilized.

Contra Asset Account

A type of account that reduces the total value of a related asset account on a company's balance sheet.

Asset-Expense Relationship

The correlation between a company's assets and expenses, indicating how asset utilization incurs costs.