Which of the Following Is an Example of Roundabout Production

question 6

Multiple Choice

Which of the following is an example of roundabout production?

• A)A farmer switches from growing soybeans to growing wheat, getting fewer crops per year as a result.
• B)A farmer switches from growing soybeans to growing wheat, getting more crops per year as a result.
• C)A self-employed dressmaker becomes a wage worker at a factory that makes dresses.
• D)A coal mine is sold by its owners to its workers and run as a cooperative.
• E)A telemarketing firm declares a holiday for two days while a new phone system is installed.

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Definitions:

FASB

An abbreviation for Financial Accounting Standards Board, the organization responsible for establishing accounting and financial reporting standards in the United States.

Qualitative Characteristics

The attributes that make the information provided in financial statements useful to users.

Quarterly Financial Statements

Financial reports that are released by companies every three months to provide investors and analysts insights into their performance and financial health.

Materiality Constraint

A principle that allows accountants to disregard minor errors or omissions in financial statements when such misstatements are not expected to influence the decision of a reasonable user.