Which of These Activities Will Most Likely Impose an External

question 93

Multiple Choice

Which of these activities will most likely impose an external cost?

• A)An athlete works out at a gym.
• B)A secretary smokes a cigarette in a crowded break room.
• C)A young mother pushes her baby in a stroller.
• D)A construction worker eats a hotdog during his lunch break.

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Definitions:

Deferred Creditor

An entity to whom a payment is owed but the payment is delayed or deferred to a future date.

Trade Creditors

Amounts owed by a business to its suppliers for goods and services purchased on credit.

Liquidator's Remuneration

Compensation paid to a liquidator for carrying out the process of winding up a company, including selling off assets, paying creditors, and distributing any remaining funds to shareholders.

Journal Entries

Records of financial transactions in the accounts of a business, providing a chronological order of all debits and credits.