Under the Accrual Method of Accounting,the Two Tests to Determine

question 62

True/False

Under the accrual method of accounting,the two tests to determine when income must be reported and expenses deducted are the all-events test and the economic performance test.

Understand the process of preparing financial reports in QuickBooks Online (QBO).

Distinguish between financial statements and tax forms preparation principles.

Understand the components and presentation of a balance sheet.

Recognize the elements and significance of owners' equity.

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Definitions:

Equilibrium GDP

Equilibrium GDP, or Gross Domestic Product, is the level of output where aggregate demand equals aggregate supply, resulting in no unintended changes in inventories.

Inflationary Gap

This term reflects the difference between the actual output of an economy and the maximum potential output it could achieve with full employment, often indicating inflation pressures.

Equilibrium GDP

The level of Gross Domestic Product at which the total quantity of goods and services produced equals the total quantity of goods and services purchased.

Deflationary Gap

A condition in which aggregate demand is lower than the aggregate supply potentially leading to deflation.