Which of the Following Is NOT One of the Components

question 38

Multiple Choice

Which of the following is NOT one of the components for computing GDP based upon the income approach?

• A)Net interest
• B)Corporate profits
• C)Investment
• D)Compensation of employees

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Definitions:

Retrospective Adjustments

Adjustments made to the financial statements of prior periods when adopting a new accounting principle, as if that principle had always been applied.

Salvage Value

The estimated residual value of an asset after its useful life is over.

Straight-Line Method

A method of calculating depreciation of an asset which spreads the cost evenly across the useful life of the asset.

Prior Period Adjustment

Adjustments made to the financial statements to correct errors or inaccuracies from previous periods.