If an Activity Has an External Benefit, Such as Education

question 338

True/False

If an activity has an external benefit, such as education, a tax on that activity can lead to the efficient level of output being produced.

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Definitions:

Accrued Revenue

Revenue earned but not yet received in cash or recorded at the statement date, usually recognized in accrual basis accounting.

Snow Removal Services

Companies or departments dedicated to clearing snow and ice from outdoor surfaces, such as roads and walkways, to ensure safety and accessibility.

Adjusting Entries

Entries recorded at the conclusion of an accounting period to adjust the account balances prior to the creation of financial statements.

Revenue And Expense

Key components of an income statement, with revenue representing income earned and expense depicting costs incurred in generating that income.