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When a Company Maintains Its Own Records of Stock Transactions

question 85

Essay

When a company maintains its own records of stock transactions and capital stock outstanding, its internal controls must be adequate to accomplish three objectives. List them below.

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Definitions:

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both private costs and externalities.

Society

A large group of individuals who live in the same area, share a common culture, norms, and values, and are organized in a cooperative manner.

Negative Production Externality

A situation in which the production of goods or services imposes costs on third parties not involved in the transaction, often not reflected in market prices.

Benefits To Consumers

The advantages or improvements in welfare, service, or product quality experienced by consumers.

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