Joint Ventures

question 1

Multiple Choice

Joint ventures:

• A) are an alternative to new ventures.
• B) are attractive when speed is important.
• C) are attractive when entry barriers are high.
• D) should be done on a small scale.
• E) reduce the risk of loss of proprietary knowledge.

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Definitions:

Fees Earned

Revenue generated from providing services, as opposed to selling goods, in a given period.

Prepaid Expense

An expense that has been paid in advance and will be recognized as an expense in a future accounting period.

Normal Balance

The side of an account, either debit or credit, where increases in the account are recorded.

Net Book Value

The value of an asset after accounting for depreciation or amortization, representing its carrying value on the balance sheet.