The Basic Notion of Economies of Scale Is That as a Plant

question 68

True/False

The basic notion of economies of scale is that as a plant gets larger and volume increases, the average cost per unit of output drops.

Understand the principle of double-entry bookkeeping.

Learn how expense accounts are affected by transactions.

Identify the components and purposes of journalizing and posting in accounting.

Recognize the normal balance side for different types of accounts.

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Definitions:

Amortization

The process of spreading out a loan into a series of fixed payments over time, decreasing the balance through payments towards the loan's principal and interest.

Depreciation Adjustment

An accounting method that allocates the cost of a tangible asset over its useful life.

Remaining Life

The estimated duration for which an asset is expected to be economically useful or operational.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted for the investor's share of the investee’s profits or losses.