Transfer Payments Are an Injection into the Circular Flow of Income

question 37

True/False

Transfer payments are an injection into the circular flow of income and expenditure model.

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Definitions:

Equipment

Assets that are tangible and used in the operation or process of a business, such as machinery, buildings, or vehicles.

Wages Expense

Wages Expense is the total cost incurred by a business for paying salaries and wages to its employees during a financial period.

Wages Payable

An account liable for recording the unpaid earnings of employees for their completed work.

Accrue

The process in accounting by which revenues and expenses are recognized when incurred, regardless of when cash transactions occur.