Social Accounting,

MS(QE) Second Year,

Second Semester: 2023-24

Assignment 3: On Modules 2 to 4
[To be completed before 18th April 2024)] 14th April
2024
1 Which of the following is/ are considered transactions in the 2008 SNA?
(a) Consumption of fixed capital.
(b) Rise in the value of a real estate property.
(c) Acquisition of private land by government by its administrative authority
(d) Taxes paid for inheriting property
(e) Sale and purchase of real estate property
(f) Withdrawal of raw materials by a manufacturer from its inventory
(g) An individual’s gain due to rise in the price of company shares held by the person
(h) Loss of economic ownership of land due to war.
2 Considering only all the resident-to-resident transactions, which of the following statements
are TRUE?
(a) Acquisition of valuables is equal to disposal of valuables.
(b) Sale of products is always equal to purchase of products.
(c) There is no difference between the sum of primary income received and the sum of
primary income paid
(d) Sum of all holding gains is equal to the sum of all holding losses.
(e) Financial assets of a company remains unchanged when it purchases machinery worth
the same as new shares floated.
3 Which of the following is/ are TRUE:
(a) Net lending to minus net borrowing from RoW is equal to sub-total of resources-side
minus sub-total of uses-side of non-financial transactions.
(b) In an open economy, primary income receivable is always equal to primary income
payable.
(c) Sum of values of products sold is always equal to that of products purchased.
(d) Sum of money in-flow minus money out-flow of non-financial transactions is equal to
change in liabilities minus change in financial assets.
(e) Considering only monetary transactions, change in financial assets is always equal to
change in liabilities.
(f) Considering only monetary transactions, sum of money in-flow minus money out-flow
of non-financial transactions is equal to change in liabilities minus change in financial
 assets.
4 Which of the following is / are TRUE?
(a) Value of products sold + imports ≡ Value of products purchased + exports.
(b) Primary income receivable from domestic units & RoW ≡ Primary income payable to
domestic units & RoW
(c) Goods sold by the domestic economy to RoW is shown as exports in the RoW account.
(d) Some transactions with the RoW are reflected in the production account of an economy.
(e) Transfers payable from domestic units & RoW ≡ Transfers receivable to domestic
units & RoW
(f) ‘Bought products’ of the RoW represent imports of domestic economy.
(g) ‘Paid income’ of the RoW is ‘Paid income’ of the domestic economy.
5 (a) If for a domestic economy, the value of market output = 150 and the value of net exports =
20, then what is the value of purchase of (market) products ?
[ ] a) 130
[ ] b) 170
[ ] c) 150
[ ] d) Cannot be ascertained
5(b) If for a domestic economy, the value of purchase of (market) products = 140 and net exports
= 10, then what is the value of market output?
[ ] a) 130
[ ] b) 140
[ ] c) 150
[ ] d) Cannot be ascertained
6 Which of the following balancing items of the accounts for an economy is/ are NOT affected
by any kind non-monetary transactions?
(a) GDP
(b) Operating surplus / Mixed income
(c) GNI
(d) GNDI
(e) Savings
(f) Net lending / borrowing.
7 Which one of the following sequence of balancing items is in order of their appearance in the
sequence of accounts
(a) GNI → GDP → Savings
(b) GNI → Savings → net lending / borrowing
(c) net lending / borrowing → Savings → GNDI
 (d) None of the above
8 Which of the following is / are TRUE?
(a) Interest is recorded when it is actually paid.
(b) Output and intermediate consumption are recorded when the production takes place.
(c) Imports are valued at prices at the importers’ custom frontier, which include the insurance
and freight costs.
(d) The time of recording acquisition of goods is the moment of change in economic
ownership.
(e) Rent is recorded when it is actually paid.
(f) Compensation of employees is recorded when it is actually paid.
(g) If there is no appropriate market for a non-monetary exchange transactions of good or
service, the valuation is done at cost.
9 Which of the following is / are NOT TRUE regarding production account?
(a) Rent paid for land is recorded in the uses-side of production account.
(b) The cost (royalty) of using intellectual property product (IPP), is included in uses-side of
the production account.
(c) Entries in production account relate to transaction of products.
(d) All goods and services used as intermediate consumption are necessarily produced.
(e) Purchase of war planes by a government is recorded in the uses-side of production
account.
(f) Product taxes are recorded in the resources-side of production account for the total
economy.
(g) Entries in production account relate to income.
(h) Payment to workers is recorded in the uses-side of production account.
10 Which of the following is / are NOT TRUE regarding generation of income account?
(a) Transactions relating to income generated in production are recorded in the generation of
income account
(b) The generation of income account presents flows of income at the source, rather than the
destination, of primary income.
(c) Entries in generation of income account relate to transaction of products.
(d) The cost (royalty) of using intellectual property product (IPP), is included in resources-
side of the generation of income account.
(e) The generation of income account can be compiled for individual establishments or a
group of establishments.
(f) Income generated in the production process, is shown on the resources-side of the
generation of income account.
(g) Production-related transactions for use and disposal of products are made in the generation
of income account.
(h) For institutional sectors, product taxes are recorded in the uses-side of the generation of
 income account.
11 (a) During an accounting period, an establishment made flour, worth 100 in the market, out of
all the wheat it purchased for 60. At the end of the accounting period, a part of the flour,
worth 20 in the market, remains unsold. Assuming zero product tax, the GVO of the unit is
(a) 100
(b) 80
(c) 20
(d) None of the above
11 (b) An establishment of a construction company purchases building materials (worth 100) and
hires labour (who are paid 200) to build a warehouse for its own use. It had used its own
fixed capital for this purpose. It paid no production tax. Assuming zero product tax, the
GVO is
(a) 300
(b) 200
(c) 100
(d) None of the above
11 (c) An establishment purchases building materials (worth 200) and hires labour (who are paid
150) to build a warehouse for its own use. (No fixed assets owned by the establishment was
used for building the warehouse.) The GVO of the unit is
(a) 150
(b) 350
(c) 200
(d) None of the above
Which of the following is / are NOT TRUE regarding recording of output?
12
(a) An establishment’s sale of its products to a different enterprise is included in the GVO of
the establishment.
(b) Output of services is recorded when the payment for it is made.
(c) The value of withdrawal of finished goods from inventory and sale is NOT included in
output of the current accounting period.
(d) An institutional unit’s receipts from the users of the unit’s produced assets is recorded as
its output.
(e) Movement of product of one establishment of an enterprise to another of the same
enterprise is not always recorded as output.
(f) Output is recorded when it is sold.
(g) Output of goods is recorded when it is produced and not when it is sold.
(h) Unsold finished goods is NOT included in output.
(i) Government’s receipts from sale is NOT included in the value of its output.
(j) Services provided free by the government is valued at market prices.
(k) The value of withdrawal of finished goods from inventory and sale is NOT included in
 output of the current accounting period.
13 Which of the following is / are NOT included in intermediate consumption?
(a) For a non-financial enterprise, allocated FISIM.
(b) Expenditure on materials for mineral exploration
(c) Salary and wages paid to the workers.
(d) Repair & maintenance of dwellings, for owner-occupier of dwellings.
(e) Expenditure on weapons systems by the government.
(f) SNA interest
(g) Fees paid to professionals, such as legal consultants.
(h) Services of the non-produced resources used for production
14 Which of the following is / are included in compensation of employees?
(a) Wages & salaries.
(b) Pension to ex-employees
(c) Cost of hotel accommodation of employees on business tour.
(d) Housing services provided to the employees and their dependents.
(e) fees paid to self-employed consultant.
(f) Income tax deducted by the employer from employees’ salaries.
(g) Employers’ (social) contribution towards employees’ provident fund.
(h) Entire amount of insurance premium paid by employers on behalf of the employees.
15 Which of the following statements is/ are TRUE?
(a) Holding companies are always included in non-financial corporate sector.
(b) Head offices of financial subsidiaries is included in non-financial corporate sector.
(c) Branches of non-resident enterprises located in the economic territory are treated as
resident units.
(d) A notional resident unit is created when (immovable) assets are owned by a non-resident
in the domestic.
(e) All land and other natural resources are always treated as the assets of the economy in
which they are located.
16 Which of the following statements is/ are TRUE?
(a) The value of merchanting services is included in the exports of the economy of merchant’s
residence.
(b) The value of goods sent for processing from country A to country B is included in exports
of A as well as in imports of B.
(c) The value of goods sent for processing from country A to country B is neither included in
exports of A nor in imports of B
(d) If a parent MNE sends owned physical goods to an affiliate abroad to produce the final
product, the parent MNE is considered as buying a processing service from the affiliate.
 (e) When a merchant, resident of country A, purchases goods in country B and sells them in
country C, then the exports of A includes the entire value of sales in country C.
(f) The receipt of rental of a dwelling owned by a non-resident is included in GVO of the
non-financial sector of the non-resident’s economy.
17 Which of the following is / are NOT recorded in the allocation of primary income account?
(a) Compensation of employees in the resources-side.
(b) Individual and corporate income tax
(c) Import taxes in the resources-side of the government’s account
(d) Withdrawals from the income of quasi-corporate.
(e) Current transfers from RoW
(f) Rent on natural resources payable.
(g) Production taxes
(h) FISIM
(i) SNA interest
(j) Dividends receivable
(k) compensation of employees in the uses-side.
18 Which of the following is/ are NOT recorded in the secondary distribution of income account
(a) Current taxes on income and wealth
(b) Individual and corporate income tax
(c) FISIM
(d) Net social contribution
(e) SNA interest
(f) social benefits other than social transfers in kind
(g) remittances received from a family member residing abroad
(h) Individual and corporate income tax
(i) Government grant for building construction
(j) A household’s monthly donations made to an NPISH
(k) Receivable pension
(l) Insurance claims
(m) net non-life insurance premiums
(n) social transfers in kind
19 Which of the following is / are NOT recorded in the use of disposable income account?
(a) FISIM allocated to households (except the part allocated for loans for dwelling units)
(b) Government’s expenditure on major repairs
(c) Purchase of goods & services for final consumption
 (d) Government’s expenditure on providing free educational services
(e) Military expenditure on weapons system
(f) Life insurance service charges
(g) Adjustment of change in pension entitlement
(h) Rent on natural resources payable
(i) Expenditure on fertilisers by a farmer’s household
(j) Expenditure on rice for consumption by a farmer’s household
20 Which of the following is/ are TRUE?
(a) Social benefits (other than social transfers in kind) receivable and payable are recorded in
respectively resources- and uses-side of secondary distribution of income account
(b) Social transfers in kind may be received from or paid to the RoW.
(c) Insurance services component of non-life insurance premiums is recorded either in the
production account (as IC) or in use of disposable income account (as final consumption).
(d) Social transfers in kind are recorded in secondary distribution of income account
21 Which of the following is / are included in Fixed Capital?
(a) Normal repair and maintenance expenditure.
(b) Payment of commission to an agent for purchase of land.
(c) Expenditure on own-account R&D activities.
(d) Purchase of land.
22 Which of the following statements is / are TRUE?
(a) The value of goodwill of an on-going enterprise is recorded only when it is sold and the
value of sales exceeds net worth.
(b) When no mineral deposit is found, the cost of mineral exploration is treated as
intermediate consumption.
(c) Cost of ownership transfer of non-produced assets is NOT included in gross capital
formation.
(d) Permissions to use natural resources, such as rights to use radio spectra for mobile phones,
are included in non-produced non-financial assets.
23 Which of the following is / are recorded in Capital Account?
(a) Government grant for building construction.
(b) Purchase of land.
(c) Purchase of company shares.
(d) Purchase of vehicle by a household.
24 Which of the following is / are recorded in Financial Account?
(a) Capital transfer
(b) Reinvestment earnings from FDI.
 (c) Payment of bank interest.
(d) Changes in pension and non-pension entitlements.
25 Which of the following is / are TRUE?
(a) Balance of real transactions is equal to net acquisition financial assets less net incurrence
of liabilities.
(b) All financial transactions affect net lending / borrowing.
(c) Transactions reflected only in the financial account affect net lending / borrowing.
(d) For every monetary transaction at least one entry is in the financial account.
26 Which of the following is/ are TRUE?
(a) The value of purchased but not used ammunitions for army is recorded in uses- side of
production account.
(b) The value of CII of raw materials for production is recorded in uses-side of production
account.
(c) The value of CII of finished goods is recorded in resource-side of production account and
‘change in assets’ side of capital account.
(d) The value of purchased but not used ammunitions for army is recorded in ‘change in
assets’ side of capital account.
27 Which of the following is/ are TRUE?
(a) In the financial accounts, change in pension entitlements is recorded in ‘change in assets’
side for the pension fund.
(b) In the financial accounts, reinvested earnings of a domestic enterprise A from FDI in a
unit B resident of a different country are recorded in the ‘change in assets’ side for A and
‘change in liability & net worth’ side for B..
(c) In the financial accounts, change in pension entitlements is recorded in ‘change in assets’
side for the households and ‘change in liabilities & net worth’ side for the pension fund.
(d) In the financial accounts, reinvested earnings of a domestic enterprise A from FDI in a
unit B resident of a different country are recorded in the ‘change in assets’ side for B.

28 Which of the following is/ are TRUE?

(a) The SNA recommends deflation/extrapolation at the most detailed level possible
(Elementary Level of Aggregation) for constant-price estimation of an aggregate.
(b) Period-to-period change in an aggregate at constant prices reflect ONLY the change in the
quantity of the aggregate.
(c) The GDP deflator is a Paasche type price index.
(d) Growth rate of the value of a product at current prices] = [growth rate of the quantity of
output] x [growth rate of change in price of the product].
29 Which of the following is/ are TRUE?
(a) Generally, taxes on products at constant prices are estimated by deflating the current-price
estimate by an appropriate deflator.
 (b) The estimates of CII at current- and constant-prices should always have the same sign.
(c) Frequent revision of base is necessary because the price structure, i.e. relative prices of the
products change over time
(d) The output-related single indicator methods of estimating value added at constant prices
assumes parallel price movements for output and intermediate consumption and
unchanging input-output coefficients.
30 Which of the following is/ are TRUE?
(a) Trade margins at constant prices is usually estimated by deflating the trade margins at
current prices directly by an appropriate price index.
(b) The constant-price estimate of output of defence services provided by the military should
NOT be derived by deflating the current-price estimate.
(c) If the trade margin in rice trade was 120 in the base year, and the volume of rice trade is
higher by 50 per cent in the current year than the base year, then a 180 is valid constant-
price estimate of the trade margin.
(d) The change in value added at current prices can be directly decomposed into a price and a
quantity components.
31 Which of the following is/ are TRUE?
(a) The nominal and real holding gains/ losses always have the same sign.
(b) Nominal holding gain/loss = Neutral holding gain/loss + Real holding gain/loss
(c) Only the realised nominal holding gains or losses are recorded in the revaluation
account at current prices.
(d) When entry into and withdrawal from inventory is in the same accounting period, the
value of the change in inventory is equal in magnitude to the holding gain but opposite
in sign.
32 Employers’ social contribution payable by a market producer is recorded
(a) in the uses-side of the secondary distribution of income account of market producers.
(b) in the uses-side of allocation of primary income account of the government
(c) as compensation of employees in the uses-side of the generation of income account of market
producers
(d) as employees’ contribution in the uses-sides of the secondary distribution of income account
of households.
33 Sale of products by general government is recorded
(a) as negative component of final consumption in the uses-side of the use of disposable
account of general government.
(b) in the resources-side of the production account of general government
(c) the uses-side of use of disposable income account of general government.
(d) partitioned and recorded as of final consumption in the uses-side of the use of disposable
account of households and as intermediate consumption in the uses-side of market
producers.
(e) as negative component of final consumption in the uses-side of the use of disposable
account of general government.
34 Production subsidies other than product subsidies receivable by a market producer is
recorded
(a) as a negative component of the uses-side of the generation of income account of market
producers
(b) as a negative component of the allocation of primary income account of the government.
(c) in the resources-side of the generation of income account of market producers.
(d) in the uses-side of allocation of primary income account of the government.
35 Interest payable by non-financial corporate sector to financial intermediaries are partitioned
into SNA interest and FISIM and recorded as
(a) FISIM in the resources side of the allocation of primary income account of the
financial corporate sector
(b) SNA interest in the uses-side of the production account of the non-financial corporate
sector
(c) FISIM in resources-sides of production account of the financial corporate sector
(d) SNA interest in the uses-side of the allocation of primary income account of the non-
financial corporate sector