A ________ Externality Occurs When a Market Transaction Affects Others

question 38

Multiple Choice

A ________ externality occurs when a market transaction affects others through market prices.

• A) positive
• B) negative production
• C) negative consumption
• D) pecuniary

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Definitions:

Debit Balance

The sum remaining in an account after all debts have been subtracted from the total credits, indicating an excess of debits over credits.

Credits

Accounting entries that increase liabilities or equity or decrease assets, reflecting the sources of funding or income.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check the accuracy of financial recordings.

Journal Entries

Records of financial transactions entered into an accounting system, ensuring that the debits equal the credits in financial accounting records.