With Regard to the Account Size in Determining Whether to Use

question 57

Multiple Choice

With regard to the account size in determining whether to use an external agency or perform the work in-house, all of the following statements are true except:

• A)a small account is not usually attractive to a large agency.
• B)if 75 percent of the advertising budget cannot be used to buy media time and space, it is better to perform the work in-house.
• C)if the agency charges more than 25 percent of the money to design and create the ads, then the account is too small to use an external agency.
• D)a small agency is not a viable choice, even for a small account, because the agency will lack the necessary resources to do the work.

Comprehend the principles of cost-volume-profit analysis and its significance for business decision-making.

Understand the principles of double-entry accounting and the necessity of balancing debits and credits in transactions.

Comprehend the concept and usage of contra accounts in accounting.

Recognize differences between U.S. GAAP and IFRS in terms of income statement presentation and comprehensive income.

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Definitions:

Ready-Made Clothes

Garments that are mass-produced in standard sizes and sold in finished condition, as opposed to tailor-made or bespoke clothing.

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Wealthy landowners in the American South who owned large agricultural estates and relied on enslaved labor for their economic output, especially before the Civil War.

Middle-Class Homes

Residential dwellings typically inhabited by individuals or families belonging to the middle economic stratum, often characterized by stable incomes.

Indoor Toilets

Indoor toilets refer to sanitation facilities located within a building, allowing for the hygienic disposal of human waste, a significant advancement in public health and living conditions.