Which of the Following Statements Is NOT True About the Relationship

question 151

Multiple Choice

Which of the following statements is NOT true about the relationship between the dollar value of total output and total income?

• A) The dollar value of total output equals total income because the spending of one group is the income of another.
• B) The dollar value of total output equals total income because profit is considered a cost of production.
• C) The dollar value of total output equals total income because profit is not considered a cost of production.
• D) The dollar value of total output equals total income because of the economic definition of profit.

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Definitions:

Estimated Method

The estimated method is an accounting technique used to approximate the value of certain items or financial outcomes when exact figures are unavailable or impractical to determine.

Natural Disaster

A major adverse event resulting from natural processes of the Earth, such as floods, hurricanes, earthquakes, or volcanic eruptions, that can cause significant damage or loss of life.

Inventory Records

Documents that track the quantities, conditions, and locations of products a company has in stock, including raw materials, work-in-process, and finished goods.

Days' Sales in Inventory

A financial ratio indicating the average number of days it takes a company to sell its entire inventory in a given period.