Firms Use _____ to Lower Costs Through Economies of Scale,and

question 66

Multiple Choice

Firms use _____ to lower costs through economies of scale,and thus enhance their economic value creation and,in turn,their performance.

• A) Joint ventures
• B) Mergers
• C) Vertical integration
• D) Horizontal integration

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Definitions:

Contra-Revenue Account

An account that is used to record reductions in gross revenue, such as sales returns, allowances, and discounts.

Allowance Method

An accounting technique used to account for bad debts by estimating uncollectible accounts at the end of each period.

Bad Debt Expense

An expense reported on the income statement, representing the amount of receivables that a company does not expect to collect due to customer default.

Current Assets

Resources owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business, whichever is longer.