Can a Firm Go Out of Business While Making an Accounting

question 110

Essay

Can a firm go out of business while making an accounting profit. Think about a company that buys a lot of inventory, starts a factory running and then sells most of the product (at a price far above cost)to a customer who is slow in paying. Exactly why may the company fail?

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Definitions:

Continuum

A continuum is a continuous sequence in which adjacent elements are not perceptibly different from each other, although the extremes are quite distinct.

Feelings of Isolation

Emotional state where an individual feels separated from others and disconnected from social interactions.

Life and Death Instincts

Fundamental concepts in psychoanalytic theory representing the opposing forces of creation and destruction that drive human behavior.

Organismic Valuing Process

A concept in humanistic psychology referring to the inner process by which individuals evaluate their experiences as fulfilling or enhancing, guiding growth and behavior.