When the Government Funds a Project That Will Create Jobs

question 103

Multiple Choice

When the government funds a project that will create jobs, the funds for the project

• A) are essentially free, because the project originated in the government sector.
• B) will leave private sector output and employment unchanged.
• C) will generate additional tax revenues that will pay for the project.
• D) will have to be either taxed or borrowed from the private sector.

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Definitions:

Aging of Accounts Receivable

A process of categorizing accounts receivable based on how long they have been outstanding to estimate potential uncollectible amounts.

Allowance for Doubtful Accounts

An accounting provision made by companies to account for anticipated losses due to customers' failure to pay owed amounts.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus reasonably predictable costs of completion, disposal, and transportation.

Uncollectible Accounts

Accounts receivable that are determined to be uncollectible from debtors, leading to them being written off as a business loss.