Understanding the External Environment of a Firm Requires One Ultimately

question 29

Multiple Choice

Understanding the external environment of a firm requires one ultimately to identify:

• A)The opportunities to make profit in the industry
• B)The five forces identified by Porter's model
• C)The barriers to entry and to exit in that industry
• D)The expected level of profit in the mid.term for that industry

---

Definitions:

Closed

Closed refers to the status of an account, position, or transaction that has been settled or concluded, with no further action or activity pending.

Utilities Expense

Costs incurred for essential services such as electricity, water, and gas used by a business during an accounting period.

Prepaid Insurance

Payments made in advance for insurance coverage, which is then expensed over the period the coverage is applicable.

Post-Closing Trial Balance

A list of all real accounts that remain after closing entries are made and have balances, used to verify the equality of debits and credits.