Which of the Following Statements Is True of Public Debt

question 5

Multiple Choice

Which of the following statements is true of public debt?

• A) Public debt is also known as fiscal debt.
• B) The net public debt includes sums that the government owes to itself.
• C) The Department of Commerce sells IOUs on behalf of the U.S. government.
• D) The interest on treasuries is paid by federal taxes.
• E) The net public debt does not include funds held by the Federal Reserve System.

---

Definitions:

Lease Liability

An obligation representing future lease payments for the use of assets, recognized on the balance sheet by lessees under new accounting standards.

Capital Lease

A lease agreement that grants a lessee essentially all the risks and rewards of ownership, so it's accounted for on the balance sheet as an asset and liability.

Income Tax Expense

The amount of money a company is required to pay in taxes based on its taxable income, accounted for in the income statement.

Deferred Tax Liability

A tax obligation that a company owes but is not required to pay until a future date, often resulting from differences in accounting practices.