Which of the Following Checks Issued by the Government Represents

question 75

Multiple Choice

Which of the following checks issued by the government represents a transfer payment?

• A) The federal government pays a defense contractor for development of a missile system.
• B) The federal government pays a retiree her Social Security benefits.
• C) The state of Oregon pays a construction firm for its work in repairing a state highway.
• D) The state of Illinois pays groundskeepers at the state capitol building their weekly wages.

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Definitions:

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term liquidity and ability to finance its operations.

Current Assets

Current assets are a balance sheet item that represents the value of all assets that can reasonably be expected to be converted into cash within one year, including cash, marketable securities, accounts receivable, and inventory.

Total Assets

The sum of all assets owned by a business, including cash, investments, property, and equipment, representing the resources it has at its disposal.

Cash

A form of liquid asset that represents immediate purchasing power and can be used for transactions or as a reserve for future payments.