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:

Accounts Receivable

Accounts receivable represents money owed to a company by its customers for goods or services provided on credit.

Notes Receivable

Financial assets representing money owed to a company by customers or others, usually evidenced by a written promissory note.

Accounts Receivable

Monies owed to a company by customers for products or services that have been delivered or used but not yet paid for.

Aging the Accounts

The process of categorizing and reviewing accounts receivable based on the length of time an invoice has been outstanding.