A Demerit Good Is a Good or Service That

question 24

Multiple Choice

A demerit good is a good or service that

• A)the political process has deemed socially desirable.
• B)can be consumed by one individual without affecting the consumption of another individual.
• C)is not subject to the principle of mutual exclusivity.
• D)the political process has deemed socially undesirable.

---

Definitions:

Public Company Accounting Oversight Board

An independent oversight body established by Congress to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.

Auditing Standards

Rules and guidelines set by governing bodies that dictate the auditing process, ensuring consistency, and reliability in financial reporting.

Sarbanes-Oxley Act

A U.S. federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures, including those related to financial statements and corporate governance.

Authoritative Accounting Guidance

Officially recognized principles and standards that govern financial reporting and accounting practices.