The Two Best Reasons for a Government to Intervene in a Market

question 43

Multiple Choice

The two best reasons for a government to intervene in a market are to:

• A)raise revenues and to promote stability
• B)promote equity and to raise revenues
• C)promote efficiency and to raise revenues
• D)promote equity and to promote efficiency

---

Definitions:

Bad Debt Accruals

Bad debt accruals are amounts set aside by a company to cover accounts receivable that are not expected to be collected because customers are unable to pay.

Ages Receivables

A method of categorizing accounts receivable according to the length of time an invoice has been outstanding.

Gross Accounts Receivable Approach

A method to estimate the total amount of receivables, including both collected and still outstanding payments.

Unadjusted Year End

The conclusion of a fiscal year before any adjustments are made for accounting purposes, such as accruals or deferrals.