Accruals That Are Based on Estimated Changes in Fundamental Economic

question 47

Multiple Choice

Accruals that are based on estimated changes in fundamental economic performance of the firm are:

• A) Discretionary accruals
• B) Nondiscretionary accrual
• C) Operating accruals
• D) Cookie jar accruals

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Definitions:

Constant-Cost Industry

An industry in which the cost of production does not change as the industry's output changes.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a period long enough for firms to enter or exit the market.

Prices of Resources

The costs associated with acquiring the inputs needed for production, such as labor, raw materials, and capital.

Economic Profits

The variance between gross income and total costs, considering both explicit and implicit expenses.