Which of the Following Selections Correctly Matches the Financial Statement

question 54

Multiple Choice

Which of the following selections correctly matches the financial statement with its description?

• A) Income statement - tells how much a firm is making or losing.
• B) Income statement - depicts the structure of a firm's assets and liabilities.
• C) Balance sheet - shows where a firm's cash is coming from.
• D) Balance sheet - tells how much a firm is making or losing.
• E) Statement of cash flows - depicts the structure of a firm's assets and liabilities.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Diseconomies of Scale

A condition when a company or business grows so large that the costs per unit increase, leading to reduced efficiency.

Constant Returns to Scale

A situation in production where an increase in the quantity of inputs leads to a proportional increase in the quantity of output.

Economic Cost

A payment that must be made to obtain and retain the services of a resource; the income a firm must provide to a resource supplier to attract the resource away from an alternative use; equal to the quantity of other products that cannot be produced when resources are instead used to make a particular product.