The Difference Between the Value of a Business as a Going

question 417

Multiple Choice

The difference between the value of a business as a going concern compared with what is collected from selling the assets of the company is known as a(n) :

• A)going concern surplus
• B)final concern surplus
• C)bankruptcy surplus
• D)potential concern surplus
• E)real surplus

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Definitions:

Physical Inventory

The process of counting and verifying all physical goods and materials in stock by a business.

Shipping Costs

The expenses involved in transporting goods from one location to another, including freight charges, packaging, and handling fees.

Diseconomies of Scale

An economic concept where an increase in production leads to a rise in average costs per unit due to inefficiencies.

Economies of Scale

Cost advantages that a business can achieve by increasing the scale of production, leading to lower average costs per unit due to spread fixed costs and operational efficiencies.