If a Country Has a Trade Deficit, Does It Indicate

question 18

Multiple Choice

If a country has a trade deficit, does it indicate that the country has a serious problem?

• A) No. Trade deficits occur when a country's investment spending is higher than its level of saving.
• B) Yes. Trade deficits occur when a country has low productivity.
• C) Yes. Trade deficits occur when a country does not have a comparative advantage in production.
• D) Yes. Trade deficits occur when a country has a high budget surplus.

Define opportunity cost and its significance in the decision-making process.

Understand the steps and critical considerations in the decision-making process.

Appreciate the role of accuracy, relevance, and timeliness in making the accounting information useful for decisions.

Understand the concept of sunk costs and their irrelevance in future decision-making.

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Definitions:

Salaries Payable

The amount owed to employees for work performed that has not yet been paid at the end of a reporting period.

Salaries Expense

The total amount of salary payments made to employees, recognized as an expense on the income statement.

Direct Method

A cash flow statement reporting approach where actual cash flow information from the company's operating activities is provided, distinguishing between cash receipts and payments.