Significant Accounting Policies May Not Be

question 32

Multiple Choice

Significant accounting policies may not be

• A) Selected on the basis of judgment
• B) Selected from existing acceptable alternatives
• C) Unusual or innovative in application
• D) Omitted from financial statement disclosure on the basis of judgment

---

Definitions:

Private Marginal Cost

The cost incurred by a firm or individual for producing one additional unit of a good or service, not including external costs.

Traffic Congestion

Refers to the situation where there are more vehicles than the road can accommodate, leading to slower speeds, longer trip times, and increased vehicular queuing.

Marginal Social Cost

The total cost incurred by society when the production of a good or service is increased by one additional unit, including both private and external costs.

Common Resources

Goods that are non-excludable and rivalrous, meaning they are available to all but can be depleted by overuse.