The Purchase of Carroll's Foods for Its Hog-Growing Facilities by Smithfield

question 49

Multiple Choice

The purchase of Carroll's Foods for its hog-growing facilities by Smithfield Foods, the world's largest pork processor, is an example of

• A)forward integration.
• B)horizontal integration.
• C)backward integration.
• D)transferred integration.
• E)mass integration.

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Definitions:

Straight-Line Depreciation

An approach to evenly spread the cost of a tangible asset throughout its period of use.

Time Period Assumption

The accounting principle that allows the business operations to be divided into specific time periods such as months, quarters, or years for reporting purposes.

Accrual Basis Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transaction actually takes place. This method provides a more accurate picture of a company's financial condition than cash basis accounting.

Expense Recognition

The accounting principle that expenses should be recorded in the period in which they are incurred, matching them with the revenues they help to generate.