Which of the Following Will Be Excluded from the Measurement

question 22

Multiple Choice

Which of the following will be excluded from the measurement of gross domestic product (GDP) ?

• A)The market value of automobiles purchased by the federal government
• B)The market value of California wine purchased by a Canadian firm
• C)The payment of employees' medical insurance
• D)The market value of computers purchased by state governments
• E)The market value of transactions in the underground economy

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Definitions:

Intra-entity Gross Profit

The gross profit resulting from transactions within the same company or between parent and subsidiary companies, which may need to be eliminated in consolidated financial statements.

Consolidation Worksheet

A tool used in preparation of consolidated financial statements that helps combine the financials of a parent company and its subsidiaries.

Goodwill

An intangible asset on a company's balance sheet representing the premium paid over the book value of the assets acquired in a merger or acquisition.

Undervalued Equipment

Equipment or assets that are appraised or recorded on financial statements at a value less than their true market value.