The Basis of Accounting Selected by or Imposed on a Government

question 38

Multiple Choice

The basis of accounting selected by or imposed on a government can influence which of the following?

• A) A decision to contract-out a specific service rather than provide that service itself.
• B) The amount of annual contribution to keep pension fully funded.
• C) The amount that is available to spend on a donor-specified project or service.
• D) All of the above.

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Definitions:

Cost Of Completion

The estimated expenses associated with finishing a project, product, or service in its entirety.

Normal Profit

The minimum amount of profit necessary for a company to remain competitive in the market, often considered a breakeven profit.

LIFO

The Last In, First Out approach to inventory valuation prioritizes the sale of the most recently manufactured items before older stock.

Tax Advantage

A tax advantage refers to the economic bonus that applies to certain accounts or investments that are exempt from taxation, or taxed at a lower rate.