When Estimating GDP, Changes in the Level of Inventory Are

question 102

Multiple Choice

When estimating GDP, changes in the level of inventory are calculated because:

• A)it indicates the level of employment in the economy.
• B)it provides information about a firm's expectations.
• C)it is a good indicator of the competitiveness of the economy.
• D)it shows the level of business spending by firms.
• E)it determines the value of goods produced in a year but not sold in that year.

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Definitions:

Income Summary

An account to which all income statement account balances are transferred at the end of an accounting period to show the period's profit or loss.

Debit Balance

A situation in accounting where the sum of debits in an account exceeds the sum of credits, often indicating the extent of assets or expenses.

Closing Entries

To transition balances from temporary to permanent accounts, journal entries are executed at the end of the accounting period.

Adjusted Trial Balance

An inventory of accounts and respective balances post-adjustment actions, serving the purpose of crafting financial statements.