Conventional Budget Accounting Practices Tend to Overstate Deficits in Inflationary

question 171

Multiple Choice

Conventional budget accounting practices tend to overstate deficits in inflationary periods because they

• A)ignore the inflation tax.
• B)confuse repayment of principal with real interest expenditures.
• C)double count some expenditures.
• D)understate real interest rates.

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Definitions:

External Auditors

Independent auditors who examine the financial statements of an entity to ensure accuracy and compliance with applicable standards.

Internal Controls

Procedures and policies implemented by a company to ensure the integrity of financial and accounting information, promote accountability and prevent fraud.

Independent

Free from external control or influence; not connected or dependent on something else.

Internal Control Systems

Processes and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.