One Key Difference Between Government Activities and Private Transactions Is

question 252

Multiple Choice

One key difference between government activities and private transactions is that

• A) government can enforce involuntary transactions, whereas private transactions are mostly voluntary.
• B) government can produce only services, whereas private producers can produce both goods and services.
• C) government does not run any production operations, whereas private firms have the main purpose of running production operations.
• D) government does not earn revenues from its activities, whereas private firms aim to earn revenues and profits.

---

Definitions:

Net-of-Tax Interest Expense

The interest expense after considering the effects of income tax, representing the actual cost of borrowing to the entity.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction, including the rules and standards for financial reporting.

Fair Value

The approximate value for which an asset or liability might be traded between informed, willing participants in a fair deal.

Grant Date

The date on which an employee is given the option to purchase stock at a set price.