MrSwitch, a Local Business Man, Owns Two Different Businesses-A Lumber

question 79

Multiple Choice

Mr.Switch, a local business man, owns two different businesses-a lumber sawmill and a restaurant.The price of lumber has declined and therefore sawmill is in financial difficulty.However, the restaurant is thriving, and Mr.Switch would like to start paying two of the sawmill employees under the restaurant's payroll.His accountant explains that this is not in accordance with certain basic principles in accounting.Which principle is he referring to?

• A)Full disclosure
• B)Periodic-reporting assumption
• C)Entity concept
• D)Unit-of-measure assumption

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Definitions:

Globalization

The increasing interconnectedness and interdependence of the world's markets, cultures, and populations.

Influential

Having the power to sway decisions, opinions, or the development of events, often used to describe persons or ideas that have a significant impact.

Cumulative Costs

entail the total expenses incurred over time, considering all resources expended or lost, including indirect and direct costs.

Operations

The activities and processes designed to deliver a product or service effectively and efficiently.