To Make a Decision About a Special Order, Managers Need

question 99

Multiple Choice

To make a decision about a special order, managers need to know whether:

• A) The order replaces regular business
• B) The customer will buy the same product in the future
• C) The customer is a not-for-profit organization
• D) The order has a long-term strategic effect

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, representing the premium paid for the company’s reputation, brand, or other unique qualities.

Identifiable Net Assets

Assets that can be separated from the company and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract.

Matching Principle

An accounting principle that dictates that expenses should be recorded in the same period as the revenues that are generated as a result of those expenses, to accurately represent the financial performance of a company.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life.