Why Did Governmental Accounting Practices Develop with a Focus on the Sources

question 5

Multiple Choice

Why did governmental accounting practices develop with a focus on the sources and uses of expendable funds rather than on net income?

• A) The government wants to keep the earnings discrete
• B) Net income is solely for private organizations
• C) Tax and other non exchange revenues are not equivalent to sales
• D) Net income is solely for public organizations

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Definitions:

Perfectly Price Discriminate

The practice of a seller charging the maximum possible price that each consumer is willing to pay for a product, rather than charging everyone the same price.

Societal Loss

The total loss in welfare or efficiency that occurs when market equilibrium is not achieved, often due to externalities, monopolies, or other market failures.

Monopoly

A market structure characterized by a single seller who has exclusive control over the supply of a good or service.

Perfect Price Discrimination

Occurs when a firm charges the maximum amount that buyers are willing to pay for each unit.