If a Firm Cuts Inputs in Half, and Output Falls

question 72

Multiple Choice

If a firm cuts inputs in half, and output falls by more than half, then there are

• A)increasing returns to scale.
• B)decreasing returns to scale.
• C)constant returns to scale.
• D)decreasing marginal returns.

Understand the concepts of prepaid expenses, unearned revenues, and accrued expenses.

Analyze the impact of adjusting entries on financial statements.

Distinguish between the cash basis and accrual basis of accounting.

Learn to prepare income statements and statements of changes in equity from adjusted trial balances.

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Definitions:

Agent

An individual or entity authorized to act on behalf of another in legal or business matters.

Holder in Due Course

A legal term for a party who has acquired a negotiable instrument in good faith and for value, affording them certain protections.

Promissory Note

A financial document in which one party promises to pay another a specific sum of money at a specified time or on demand.

Fraudulent Alteration

The illegal modification of a document or instrument in a manner that changes its legal rights or obligations, intended to deceive or defraud.