Final answer:
IAS 1 generally does not allow offsetting of assets and liabilities, or income and expenditure, except in specific circumstances like where there's a legal right to offset and a net settlement intention. Governments make up budget deficits by borrowing, and having both trade surplus and capital inflow is complex and can affect exchange rates.
Step-by-step explanation:
The question refers to the accounting standards set by the International Accounting Standards (IAS) and whether IAS 1 permits offsetting assets and liabilities, and income and expenditure against one another.
It's important to understand that the offsetting of items within the financial statements is generally excluded according to the principles laid out in IAS 1 because each item ought to be shown separately to provide clear and relevant information to the users of financial statements.
That said, there are specific situations where offsetting is allowed under IFRS, which include instances where a legal right to set-off exists and when it is intended for the net amount to be realized or settled.
Regarding the self-check questions provided in the query, which are not directly linked to the main question, governments make up the differences between tax revenue and spending primarily by borrowing.
Either through issuing government bonds or obtaining loans from financial institutions, governments finance their deficits.
Lastly, striving for both a trade surplus and healthy capital inflow is complex and can present various economic repercussions. Although technically possible, an influx of foreign capital can impact the exchange rate, potentially making exports less competitive and affecting the trade balance.