The Resources Owned by Firms That Shut Down in the Process

question 38

Multiple Choice

The resources owned by firms that shut down in the process of creative destruction:

• A)are used in activities that are identical to the failed business.
• B)are used where they have less value and thus reduce cost.
• C)move to activities where they are more highly valued.
• D)are liquidated and can never be used again.
• E)are written off and contribute to wastage in the economy.

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Definitions:

Rent Fees

Periodic payments made by a tenant to a landlord in exchange for the use of land, a building, or other property.

Worksheet

A document or tool used for planning, calculating, or recording information, especially in accounting and tax preparation.

Merchandise Inventory Account

The merchandise inventory account represents the total cost of all merchandise that is available for sale by a retail or wholesale business during a specific accounting period.

Beginning Inventories

The value of all the inventory items that a company has in stock at the start of an accounting period.