Explain the Difference Between Fully Funded Social Security System and Pay-As-You-Go

question 33

Essay

Explain the difference between fully funded social security system and pay-as-you-go social security system.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Equipment

Durable assets used in the operation of a business, not intended for sale, that are used over time.

Journal Entry

A record in accounting that represents a transaction in the books of account, consisting of debits and credits.

Prepaid Rent

An asset account on the balance sheet representing rent payments made in advance of the rental period.