Congress Is Sometimes Said to Possess the "Power of the Purse

question 8

Multiple Choice

Congress is sometimes said to possess the "power of the purse." What is meant by this saying?

• A)Only Congress has the power to coin money and regulate its value.
• B)Congress has the power to ask the individual states to contribute to pay off the national debt.
• C)The president cannot veto any law that Congress passes if it relates to finances.
• D)Only Congress has the power to tax and spend.

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Definitions:

Reporting Units

Segments or components of a business for which discrete financial information is available and reviewed by the operating segment's management.

Equity Method

An accounting technique used by a company to record its investment in another company, where the investment's value is adjusted in accordance with the investee's performance.

Partial Equity Method

An accounting method used for investments, where the investor recognizes its share of the investee's earnings, but adjustments are less comprehensive than under the full equity method.

Initial Value Method

A technique in accounting where an investment is recorded based on its initial purchase cost, maintaining this value without considering subsequent adjustments unless a permanent decline occurs.