Which of the Following Is True of Disposable Income

question 49

Multiple Choice

Which of the following is true of disposable income?

• A)It excludes transfer payments.
• B)It is the portion of income that is used solely for consumption.
• C)It is that part of total earned income that is paid to the government in the form of taxes.
• D)It is the difference between income and saving.
• E)It equals consumption expenditures plus saving.

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Definitions:

Foreign Translation

The process of converting the financial statements of a company from one currency to another, often for consolidation and reporting purposes.

Goodwill

An intangible asset reflecting the excess value of a business above its net tangible assets, often arising from acquisitions.

Consolidated Balance Sheet

A financial statement showing the combined assets, liabilities, and equity of a parent company and its subsidiaries.

Acquisition Method

An accounting technique used to consolidate the financial statements of a parent company and its subsidiaries.