What Are External Costs

question 123

Multiple Choice

What are external costs?

• A)The costs involved in exporting products abroad.
• B)The costs that are suffered by outside workers.
• C)The costs that are suffered by people other than the producers or consumers of a product.
• D)The costs that are imposed on plants which are located abroad.

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Definitions:

Direct Method

A way of presenting a cash flow statement where actual cash flows from operating activities are disclosed directly.

Operating Activities

Transactions and events related to the principal revenue-producing activities of an entity, reflected in its cash inflows and outflows.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement by starting with net income and adjusting for changes in non-cash items and operating capital.

Quality of Earnings

An assessment of the degree to which a company's earnings are derived from sustainable, core business activities.