Use the Following to Answer Questions: Table: Pollution Abatement -(Table: Pollution Abatement) Refer to the Table

question 124

Multiple Choice

Use the following to answer questions: Table: Pollution Abatement $$\begin{array} { c c c } \hline \text { Firm } & \begin{array} { l } \text { Pollution Level } \\\text { (tons of } \mathrm { SO } _ { 2 } \text { ) }\end{array} & \begin{array} { l } \text { Cost of Removing One } \\\text { Ton of Pollution }\end{array} \\\hline \mathrm { A } & 30 & \$ 100 \\\mathrm {~B} & 30 & \$ 500 \\\hline\end{array}$$
-(Table: Pollution Abatement) Refer to the table. If the government wants to reduce 4 tons of pollution, what is the total cost of doing so if firms trade pollution allowances?

• A) $400
• B) $2,000
• C) $1,200
• D) $2,400

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Definitions:

Net Accounts Receivable

The amount of money owed to a company by its customers for goods or services provided, after accounting for any allowances for doubtful accounts.

Allowance Method

An accounting technique used to estimate bad debts and adjust accounts receivable to reflect only receivables expected to be collected.

Uncollectible Account

A receivable that a company has deemed unlikely ever to be collected and is therefore written off as a bad debt expense.

Trade Accounts Receivable

Amounts owed by customers to a business, specifically from sales transactions.