The Fact That a Large Company Can Enjoy Savings from Producing

question 28

Multiple Choice

The fact that a large company can enjoy savings from producing goods in high volume that are not available to a small company is called

• A)economies of scope.
• B)economies of scale.
• C)vertical integration.
• D)horizontal integration.

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Definitions:

Debits and Credits

Accounting entries that respectively increase asset or expense accounts and decrease liability, revenue, or equity accounts (for debits), and vice versa for credits.

Current Assets

Assets that a company expects to convert to cash or use up within one year or the operating cycle, whichever is longer.

Long-term Investments

Assets that a company intends to hold for more than one year, typically including stocks, bonds, or real estate, aimed at generating long-term income or appreciation.

Intangible Assets

Non-physical assets of value to a company, such as patents, trademarks, goodwill, and copyrights.