Suppose That Inventories Are Rising

question 86

Multiple Choice

Suppose that inventories are rising. We could expect that, in the future:

• A) Real GDP will likely increase
• B) Real GDP will likely decrease
• C) We can't predict what will happen to real GDP
• D) Firms will raise prices of their goods and services

Understand the process and significance of adjusting entries in financial accounting.

Acquire the ability to calculate stockholders' equity, total liabilities, and total assets after adjusting entries.

Learn the impacts of not making necessary adjusting entries on net income, assets, liabilities, and stockholders' equity.

Understand how to initially record deferrals and their subsequent adjustment.

---

Definitions:

Journal Entries

Accounting records that document all financial transactions in the order they occur, ensuring accurate tracking of business operations.

Posting

The process of recording financial transactions in the ledger of an accounting system.

Trial Balance

An accounting worksheet that sums up the balances from all ledgers into equal debit and credit column figures.

Related Accounts

Accounts in financial statements that are linked or associated with each other, often used to assess the financial health of a business.