One of the Differences Between Accounting for a Governmental Unit

question 28

Multiple Choice

One of the differences between accounting for a governmental unit and a commercial unit is that a governmental unit should:

• A) not record depreciation expense in any of its funds.
• B) always establish and maintain complete self-balancing accounts for each fund.
• C) use only the cash basis of accounting.
• D) use only the modified accrual basis of accounting.

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Definitions:

Keynesian

Relating to the economic theories of John Maynard Keynes, advocating for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of depression.

Classical

Pertains to the classical school of economic thought, focusing on free markets and the self-regulating nature of economies, emphasizing the roles of competition and supply and demand.

Monetarists

Monetarists are economists who believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods.

Supply Side

An economic theory that emphasizes the importance of increasing production and supply as a way to stimulate economic growth, often through tax cuts and deregulation.