For Computing GDP, the Official Measure of the Value of All

question 126

Multiple Choice

For computing GDP, the official measure of the value of all goods produced during a period for use in the production of other goods is called:

• A) personal investment expenditure.
• B) a capital consumption allowance.
• C) a transfer payment.
• D) gross private domestic investment.

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Definitions:

Allowance Account

A contra-asset account used to create an allowance for doubtful accounts, representing receivables that may not be collected.

Accounts Receivable

Amounts owed to a company by customers for goods or services provided on credit, which are expected to be collected in cash in the future.

Allowance for Doubtful Accounts

An allowance for doubtful accounts is a contra-asset account that reduces the total receivables reported to reflect the amount expected to be uncollectible.

Bad Debts Expense

The cost associated with accounts receivable that a company is unable to collect, recognized as an expense.