Consider the Following Three Items of Spending by the Government

question 75

Multiple Choice

Consider the following three items of spending by the government: (i) the federal government pays a $500 unemployment benefit to an unemployed person; (ii) the federal government makes a $2,000 salary payment to a Navy lieutenant; (iii) the city of Bozeman,Montana makes a $10,000 payment to ABC Lighting Company for street lights in Bozeman.Which of these payments contributes directly to government purchases in the national income accounts?

• A)only item (i)
• B)only item (ii)
• C)only items (i)and (ii)
• D)only items (ii)and (iii)

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Definitions:

Worksheet

A document or tool used by accountants to prepare financial statements and ensure that debits and credits are in balance, not typically part of the formal accounting records.

Net Loss

The amount by which expenses exceed revenues during a specific period, indicating a financial loss.

Income Statement Columns

The arrangement in the income statement that categorizes financial data, such as revenues, expenses, and net income, to convey a company's financial performance over a period.

Adjustments Columns

Sections within financial statements or ledgers where adjustments are recorded to ensure they accurately reflect the financial position at period-end.