The Average Number of Times Per Year Each Dollar Is

question 54

Multiple Choice

The average number of times per year each dollar is used to transact an exchange is known as the:

• A) liquidity of money.
• B) velocity of money.
• C) quantity theory of money.
• D) equation of exchange.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating the company's profitability.

Post-closing Trial Balance

A financial statement prepared after closing entries are made, showing the balances of all ledger accounts at the end of an accounting period.

Permanent Accounts

Accounts that carry their ending balances over to the next accounting period and are not closed at the end of the financial year.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary accounts to permanent accounts, clearing the way for the next accounting period.