Although the Collapse of Prices on the New York Stock

question 56

Multiple Choice

Although the collapse of prices on the New York Stock Exchange in October 1929 caused severe problems in the United States,it had immediate and disastrous consequences in Europe because:

• A)European royalty was the primary source of investment capital on Wall Street.
• B)the central banks of all European countries had invested heavily in American companies.
• C)the United States had become a primary international creditor during World War I.
• D)national European exchanges were not large enough to handle the influx of investors.
• E)European stock exchanges listed the same stocks and therefore crashed with New York.

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Definitions:

Process Costing

An accounting methodology used for homogenous products, allocating production costs based on processing departments or cycles.

Conversion Costs

The costs incurred in the process of converting raw materials into finished goods, typically including direct labor and manufacturing overhead.

Cutting Department

A specific section within a manufacturing facility where materials (often fabric) are cut to size before being assembled into final products.

Equivalent Unit

A concept in cost accounting used to apportion costs among finished goods and goods in process, based on work completed.