If an Activity Generates External Costs, the Decisionmakers Generating the Activity

question 234

Multiple Choice

If an activity generates external costs, the decisionmakers generating the activity will:

• A) be faced with its full costs.
• B) be faced with no costs.
• C) not be faced with its full costs.
• D) be faced with excesive costs.

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and costs, have been subtracted from total revenue.

Merchandise Inventory Account

An account in the general ledger that tracks the cost of goods intended for sale during an accounting period.

Worksheet

A document or tool used by accountants for preparing financial statements and supporting calculations.

Sales

Sales refer to the total revenue earned by a business from selling goods or services.