In What Category Is the Purchase of a Computer by a Person

question 178

Multiple Choice

In what category is the purchase of a computer by a person for household use in national income accounting?

• A)It is counted as consumption.
• B)It is counted as consumption if the computer was manufactured in the United States; otherwise it is ignored.
• C)It is included as part of investment.
• D)The purchase is not included at all, but the value of services the computer gives is included in consumption each year.

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Definitions:

Impairment Loss

A loss recognized in the financial statements when the carrying amount of an asset exceeds its recoverable amount.

Cost Model

An accounting approach that measures an asset based on its historical cost minus any accumulated depreciation and impairment losses.

Impairment

Reduction in the recoverable value of an asset below its carrying amount.