A negative externality or spillover cost occurs when the total cost of producing a good exceeds the costs borne by the producer.
- Spillover costs, commonly referred to as "negative externalities," are losses or harm that a market transaction results in for a third party. Even though they were not involved in making the initial decision, the third party ultimately pays for the transaction in some way, according to Fundamental Finance.
- An incident in one country can have a knock-on effect on the economy of another, frequently one that is more dependent on it, known as the spillover effect.
- Externalities are the names for these advantages and costs of spillover. When a cost spills over, it has a negative externality. When a benefit multiplies, a positive externality happens. Therefore, externalities happen when a transaction's costs or benefits are shared by parties other than the producer or the consumer.
Thus this is the answer.
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Answer:
<em>Voidable at Race's option.
</em>
Explanation:
If the individual was so<em> impaired at the time the contract was created that the individual was unable to comprehend what he or she was doing, a person could dis-affirm or revoke.</em>
Because the ability of Race to understand the true nature or conditions of the contract has been substantially compromised, Race (Race will dis-affirm) has voidable the contract.
Answer:
Credit to Accounts Receivable for $2,000
Explanation:
Preparation of the Journal entry
Based on the information given we were told that the Merchandise sold have a terms of 2/10, n/30, which is been recorded by debiting Accounts Receivable as well as crediting Sales for the amount of $2,000 which means that If the payment occurs on January 21 the Journal entry would include Debit to Accounts Receivable for $2,000
Dr Cash 1,960
(2,000-40)
Dr Discount on bills receivable 40
(2,000*2%)
Cr Accounts receivable 2,000
