Businesses Choose Outsourcing as an Alternative to Making Goods In-House

question 117

Multiple Choice

Businesses choose outsourcing as an alternative to making goods in-house or providing in-house services when:

• A)they want to reduce the amount of depreciation indicated on their books of account.
• B)proprietary technology has the potential to raise security concerns.
• C)conflicts arise between nonunion outside workers and in-house union employees.
• D)the company needs to reduce costs to remain competitive.

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Definitions:

Closing Process

The procedure in accounting that involves the transfer of all income and expense account balances to the retained earnings to prepare the ledger for the next accounting period.

Real Accounts

Accounts that relate to assets, liabilities, and equity, which are not closed at the end of the accounting period and carry their balances into future periods.

Permanent Accounts

Accounts that carry their balances over into the next accounting period, such as assets, liabilities, and equity accounts.

End-of-period Spreadsheet

A tool used in accounting to compile all financial information before closing the books at the end of a reporting period.