If Planned Spending Exceeds Planned Output in an Economy,the Result

question 42

Multiple Choice

If planned spending exceeds planned output in an economy,the result is a(n) _____.

• A)increase in inventories
• B)decrease in gross domestic product
• C)decrease in imports
• D)increase in government purchases
• E)unintended decrease in inventories

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Definitions:

Direct Write-off Method

A method for managing uncollectible accounts where specific debts are directly written off against income at the time they are deemed unrecoverable.

Cash Realizable Value

The amount of money that can be received from assets or receivables through normal collection processes.

Allowance Method

A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.

Credit Sales

Sales made by a business where payment is delayed as per agreed terms, allowing the buyer to purchase goods or services on credit.