Which of the Following Is an Example of a Negative

question 103

Multiple Choice

Which of the following is an example of a negative externality?

• A) An increase in the value of land you own when a nearby development is completed
• B) The costs paid by a company to build an automated factory
• C) Falling property values in a neighborhood where a disreputable nightclub is operating
• D) The higher price you pay when you buy a heavily advertised product

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Definitions:

Journalized

The process of recording financial transactions in a company's journal, which is the first step in the accounting cycle.

Adjusting Entries

Ledger adjustments made at an accounting period's end to distribute income and spending according to the period they occurred.

GAAP

A body of accounting and financial reporting standards and rules widely adopted, defined as Generally Accepted Accounting Principles.

Revenue Recognition

The accounting principle that revenue should be reported at the time goods are sold or services are rendered, regardless of when the payment is received.