One Possible Solution to Improve Performance of Regulated Firms Is

question 66

Multiple Choice

One possible solution to improve performance of regulated firms is which of the following?

• A)Allow the firm to set its own rate of return.
• B)Allow higher rates of return to cover higher cost of better performance.
• C)Allow a higher rate of return for better performance.
• D)Set lower prices when efficiency improves.

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Definitions:

Accrual Basis

An accounting method that records income and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.

Internal Service Funds

Funds used by a government or organization to account for the financing of goods or services provided by one department to other parts of the organization, on a cost-reimbursement basis.

Special Revenue Funds

Governmental funds intended to be used for specific revenue sources that are legally restricted to expenditure for particular purposes.

Debt Service Funds

Governmental funds used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.