Certain Fiscal Practices of Governments Promote Interperiod Equity While Others

question 43

Essay

Certain fiscal practices of governments promote interperiod equity while others do not. For the situations listed below, indicate whether interperiod equity is promoted or undermined. Why?
a. Issuing 30-year serial bonds to finance the construction of capital assets with estimated 30-year lives.
b. Paying for the pensions of retired employees out of resources provided by current-period taxpayers.
c. Charging the cost of supplies as expenditures in the year in which they were used rather than when they were purchased.
d. Issuing 30-year bonds to finance a portion of the current-period operating costs of a city's school system
e. Charging payments of wages and salaries made in the first week of a new year to the previous fiscal year, the year in which the wages and salaries were earned.

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