Deflation Is a Problem Because

question 158

Multiple Choice

Deflation is a problem because:

• A) the rate of inflation,though still positive,is getting lower.
• B) the dollar loses purchasing power.
• C) debt becomes easier to pay off.
• D) it takes more purchasing power to make interest payments or pay off debt.

---

Definitions:

Accounting Time Period

A specific duration of time for which financial statements are prepared, typically a quarter or a year.

Depreciation Expense

A rephrased definition: The charge to income, representing the allocation of the cost of an asset over its useful life during a specific period.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.

Adjusting Entries

Accounting records made during the closing of a financial period to properly distribute expenses and revenues to the time they were truly incurred.