An Externality Exists When

question 54

Multiple Choice

An externality exists when

• A) there are private costs.
• B) there are internal costs.
• C) there are external costs.
• D) there are opportunity costs.

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Definitions:

Accrued Salaries

Salaries that have been incurred but not yet paid to employees by the end of a financial period.

Salaries Expense

Salaries expense refers to the total amount paid to employees for services rendered during a specific accounting period, often reported on the income statement.

Salaries Payable

An account that records owed but unpaid wages to employees, regarded as a current liability on the balance sheet.

Prepaid Salaries

Expenses paid in advance for salaries, which are recorded as an asset on the balance sheet until they are actually incurred.