When Tamar Snyder Opened a Shoe Store, Her Accountant Did

question 46

Multiple Choice

When Tamar Snyder opened a shoe store, her accountant did not include the cash in her personal savings account as one of the assets of the business. This is an example of

• A)the conservatism constraint.
• B)the materiality constraint.
• C)industry practice constraint.
• D)the separate entity assumption.

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Definitions:

Illegal Price-Fixing

An unlawful agreement between competitors to set prices at a certain level, generally resulting in unfair competition and higher prices for consumers.

DuPont Cellophane Case

The antitrust case brought against DuPont in which the U.S. Supreme Court ruled (in 1956) that while DuPont had a monopoly in the narrowly defined market for cellophane, it did not monopolize the more broadly defined market for flexible packaging materials. It was thus not guilty of violating the Sherman Act.

Relevant Market

The market segment in which a company competes, defined by its products, customers, and geographic area.

Structure Versus Behavior

A distinction in competition policy and economic regulation focusing on the organization and arrangements of firms (structure) versus their actual conduct (behavior) in the market.