Which of the Following Would Be an Example of Government

question 98

Multiple Choice

Which of the following would be an example of government intervention to correct a market failure caused by buyers having inadequate information about sellers?

• A) providing unemployment compensation insurance
• B) sponsoring legislation to reduce pollution
• C) licensing of medical doctors and surgeons
• D) requiring all car drivers to buy auto insurance

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Definitions:

Credit Sales

Sales where the customer is allowed to pay for the product or service at a later date, extending credit.

Bad Debt Expense

The estimated amount of accounts receivable that is not expected to be collected.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that may not be collectible, reflecting potential losses due to credit sales.

Uncollectible Receivables

Debts owed to a company that are considered unlikely to be paid by the debtor.