Which of the Following Activities, If Any, Represents an External

question 240

Multiple Choice

Which of the following activities, if any, represents an external benefit?

• A)​The benefit to a consumer from consuming a Caesar salad.
• B)​The damage to a person's health from secondhand smoke.
• C)​The reduction in tourist revenues at a beach resort caused by an oil spill.
• D)​None of the above

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Definitions:

Dividends Account

An account in the ledger that records dividends paid out to shareholders by a company.

Retained Earnings Account

An equity account that represents the accumulated portion of net income not distributed to shareholders in the form of dividends.

Current Ratio

A financial liquidity metric that compares a company's current assets to its current liabilities, used to evaluate its ability to pay short-term obligations.

Temporary Accounts

Accounts that track revenues and expenses within a specific accounting period and are reset to zero at the period’s end.