Which of the Following Was a Prime Factor for the Economic

question 18

Multiple Choice

Which of the following was a prime factor for the economic collapse in Eastern Europe immediately following the end of the Cold War?

• A)the loss of subsidized natural gas and oil from the Soviet Union coupled with the collapse of Soviet markets made it impossible for Eastern European industries to operate and compete
• B)the markets of Western Europe stopped buying products from Eastern European nations
• C)the devastation of bombing from the Cold War between 1945-1989 had reduced Eastern Europe into ruins
• D)the nations of Eastern Europe were forced to pay back massive loans which they had taken out from Germany, France and England
• E)the removal of Soviet troops translated into a major loss of revenue from soldiers spending their paychecks in the local economy

Recognize the accounting treatment of inventories and revenue recognition under IFRS and GAAP.

Understand and calculate the components of an income statement, including sales revenue, cost of goods sold, gross profit, operating expenses, and net income.

Calculate net purchases and cost of goods purchased under a periodic inventory system.

Differentiate between GAAP and IFRS in classification and presentation of income statement items.

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Definitions:

Current Replacement Cost

The amount of money it would cost to replace an asset at the present time, considering its current condition.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy.

Net Income

The residual earnings of a company following the subtraction of all costs and taxes from its revenue.

Costing Method

An accounting approach used to value inventory and determine the cost of goods sold, which can vary, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out).