Multiple Choice
Which of the following is an example of discretionary spending?
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1. Introduction to Accounting
Types of Accounting
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Which type of accounting is most concerned with evaluating whether debts, such as student loans that help individuals advance in life, are considered acceptable or beneficial?
A
Personal accounting
B
Managerial accounting
C
Governmental accounting
D
Cost accounting
Verified step by step guidance1
Understand the context of the question: The problem is asking about the type of accounting that evaluates debts, such as student loans, in terms of their acceptability or benefit to individuals.
Review the definitions of the accounting types provided: Personal accounting focuses on managing individual finances, including debts and loans. Managerial accounting deals with internal business decision-making. Governmental accounting pertains to public sector financial management. Cost accounting analyzes costs within businesses.
Identify the type of accounting most relevant to evaluating individual debts: Since the question mentions student loans and their impact on individuals, this aligns with personal accounting, which is concerned with individual financial decisions and planning.
Eliminate the other options: Managerial accounting, governmental accounting, and cost accounting are primarily concerned with organizational or public sector finances, not individual debts.
Conclude that the correct type of accounting for evaluating individual debts, such as student loans, is personal accounting.
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