Continuing Coverage Lends Importance to an Issue

question 39

True/False

Continuing coverage lends importance to an issue.

Identify the reasons for and the accounting treatment of prior period adjustments.

Compute and interpret the book value per share of a company’s common stock.

Understand the significance of dividend per share and how it relates to market price per share and earnings per share.

Recognize the accounting entries related to stock transactions including issuance, dividend payments, and acquisition of assets through stock.

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Definitions:

Barriers

Obstacles that prevent or hinder entry into a market or the pursuit of certain activities, which can be economic, legal, technical, or natural in nature.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is produced up to the point where the last unit provides a benefit to consumers equal to the cost of producing it.

Productive Efficiency

A state where goods and services are produced at the lowest possible cost and resources are utilized in the most efficient way.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.