In a Deposit-Refund System

question 12

Multiple Choice

In a deposit-refund system,

• A) the refund component rewards potential polluters for proper disposal or recycling activity
• B) the deposit should be set equal to the MSC of illegal waste disposal to achieve efficiency
• C) monitoring and enforcement costs are higher than if a pollution charge were used
• D) actual polluters are not penalized for actions that harm the environment

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Definitions:

Unrecorded Revenues

Earnings generated from business activities that have not yet been documented in the financial accounts.

Adjusting Process

A procedure in accounting to update ledger accounts for accruals, deferrals, prepayments, and estimates so financial statements are accurate.

Revenue Account

An accounting ledger that records the income generated from sales of goods or services.

Profit Margin

A financial metric that indicates the percentage of revenue that exceeds the cost of goods sold.