Externalities

question 146

Multiple Choice

Externalities

• A) are important in the areas of environment and education.
• B) only have a negative impact on people.
• C) deal with issues that are not our internal issues.
• D) affect the people who are responsible for production.
• E) are nonexistent in unregulated, competitive markets.

Practice journalizing and posting transactions in T-accounts.

Recognize the necessity and process of adjusting entries.

Interpret and apply recent changes in accounting standards.

Understand the concept of overhead cost allocation and its significance in managerial decision-making.

---

Definitions:

Reciprocity/Obligation Rule

The social norm of responding to a positive action with another positive action, fostering mutual benefit.

Rejection-Then-Retreat Approach

A persuasive technique where an initially larger request is made knowing it will be rejected so that a smaller request (the desired outcome) seems more reasonable.

Reciprocity

A social principle where positive actions lead to similar responses by others, fostering mutual benefit or exchange.

Consensus

General agreement among the members of a group or community.