Which of the Following Is Accurate Regarding a Federal Agency's

question 18

Multiple Choice

Which of the following is accurate regarding a federal agency's Statement of Net Costs?

• A) It is similar in presentation to the GASB government-wide Statement of Activities in that earned revenues are subtracted from costs to determine the net cost of government services.
• B) Costs are measured using the accrual basis of accounting.
• C) Both (a) and (b) above
• D) Neither (a) nor (b) above

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Definitions:

Default Risk Premium

The additional yield a lender demands to compensate for the risk that the borrower may default on the loan.

Liquidity Premium

Additional yield that investors demand for holding a security that is not easily traded or sold without a significant price reduction.

Maturity Risk Premium

The extra yield that investors demand to compensate for the risk of holding a bond until its maturity date.

T-bonds

Treasury bonds, long-term government debt securities with maturity periods typically over 20 years, offering interest payments semiannually.