Over the Past Twenty Years, the Number of Small Family

question 70

Multiple Choice

Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations.Which of the following best explains this trend?

• A)diseconomies of scale in farming
• B)economies of scale in farming
• C)diminishing returns to labor in farming
• D)declining productivity

Understand the legal and ethical implications of failing to meet contractual obligations and regulatory deadlines.

Identify the role and impact of regulatory bodies and legislation on professional conduct and liability.

Understand the legal liabilities and responsibilities of accountants under the Securities Exchange Act of 1934 and the Securities Act of 1933.

Identify the conditions under which accountants can be held liable for fraud and misrepresentation in financial reporting.

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Definitions:

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and record bad debts expense.

Percent of Sales Method

A financial forecasting technique that estimates certain balance sheet and income statement items as a fixed percentage of projected sales.

Uncollectible Expenses

Costs that a business incurs from credits extended to customers that are not expected to be paid back, often recognized as bad debt expense.

Credit Sales

Sales made by a business where the payment is deferred to a later date, typically recorded as accounts receivable until payment is received.