In the Context of the Economic Environment of Business, Which

question 133

Multiple Choice

In the context of the economic environment of business, which of the following is most likely to reduce the risks of running a business?

• A) A high federal tax rate
• B) Legislation that contradicts enforceable contracts
• C) A low level of corruption
• D) Absence of government agencies dedicated to monitoring business practices

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Definitions:

Absorption Costing

An accounting strategy that considers every manufacturing expense, including direct materials, direct labor, and overhead costs (both variable and fixed), in determining a product’s cost.

Income Statement

A financial statement that shows a company's revenue, expenses, and profits over a specific period, usually a fiscal quarter or year.

Direct Labor

The labor costs directly associated with the production of goods, often calculated as wages paid to workers or hours worked.

Reconcile

is the process of ensuring that two sets of records (usually the balances of two accounts) are in agreement, often used in banking and accounting.