Buying an Existing Business Looks Appealing to the Potential Business

question 49

Multiple Choice

Buying an existing business looks appealing to the potential business owner for which of the following reasons?

• A) The existing firm is already functioning.
• B) The existing firm will always make a profit.
• C) The existing firm will have the best employees.
• D) The existing firm's owner will always provide financing.

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Definitions:

Equivalent Units

A concept used in process costing that converts partially completed units into a number of fully completed units.

In Process

A term that describes items or activities that are currently underway but not yet completed, often used in manufacturing and project management.

Conversion Cost

Refers to the combination of labor and manufacturing overhead costs incurred to convert raw materials into finished goods.

Equivalent Unit

It is a concept used in cost accounting to express the amount of work done on incomplete products in terms of fully completed units.