Which of the Following Best Explains Why the Social Security

question 87

Multiple Choice

Which of the following best explains why the Social Security system will face financial difficulties in the future?

• A) Too much Social Security revenue was invested in the private sector rather than in government bonds.
• B) In the next two decades, the number of workers paying into the system will decline sharply relative to the number of retirees collecting benefits.
• C) The federal government does not pay interest on the money it borrows from the Social Security system.
• D) The funds in the Social Security trust fund were invested in high-risk ventures that failed to pay off.

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Definitions:

Salaries Expense

The total amount paid to employees for services rendered during a specific period, typically recorded as an operating expense.

Accounts Payable

Debts incurred by a company towards its suppliers, reflected as liabilities on its balance sheet.

Prepaid Insurance

An asset account that represents insurance paid in advance, which is not yet expired and thus not yet an expense.

Owner's Capital

The equity in a firm attributable to the owner, reflecting the amount invested by and the earnings retained for the business owner.