The Following Are National Income Account Data for a Hypothetical

question 42

Multiple Choice

The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($1,050) ; personal consumption expenditures ($4,800) ; imports ($370) ; exports ($240) ; gross private domestic investment ($1,130) . Personal consumption expenditures are approximately what percentage of this economy?

• A) 60 percent
• B) 65 percent
• C) 70 percent
• D) 75 percent

---

Definitions:

Allowance for Doubtful Accounts

A contra-asset account representing the estimated amount of receivables that may not be collected, reducing net accounts receivable to a more realistic value.

Aging Schedule

An aging schedule is an accounting table that shows the breakdown of accounts receivables according to the length of time an invoice has been outstanding.

Allowance for Doubtful Accounts

A contra-account reduced from accounts receivable on a company's balance sheet that represents the amount of sales that are expected not to be collected.

Accounts Receivable

Debts that customers have towards a business for items or services received but payment is outstanding.