Economies of Scale Are Reductions in Average

question 71

Multiple Choice

Economies of scale are reductions in average

• A)Total cost that result from declining average fixed costs.
• B)Fixed cost that result from reducing the firm's scale of operations.
• C)Total cost that result from using operations of larger size.

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Definitions:

Noncontrolling Interest

An ownership interest in a corporation or segment of a corporation that is less than a majority stake, often reflected as a minority interest in financial statements.

Intra-entity Gain

A profit recognized from transactions conducted within the same legal entity, often eliminated during consolidation for financial reporting.

Excess Annual Amortization

The amount by which the yearly amortization expense exceeds the norm or expected rate, often resulting from an aggressive write-down of intangible assets.

Accrual-based Net Income

Net income calculated using the accrual method of accounting, recognizing revenues when earned and expenses when incurred, regardless of when cash transactions occur.