Which Basic Assumption May NOT Be Followed When a Firm

question 15

Multiple Choice

Which basic assumption may NOT be followed when a firm in bankruptcy reports financial results?

• A) economic entity assumption
• B) going concern assumption
• C) periodicity assumption
• D) monetary unit assumption

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Definitions:

Feudalism

A legal arrangement in preindustrial Europe that bound peasants to the land and obliged them to give their landlords a set part of the harvest. In exchange, landlords were required to protect peasants from marauders and open their storehouses and feed the peasants if crops failed.

Manufacturing Production

The process of converting raw materials or components into finished goods through the use of machinery and labor in factories.

Means of Production

The resources, such as land, factories, and tools, required for the production of goods and services.

Proletariat

In Marx’s usage, is the working class. Members of the proletariat perform physical labor but do not own means of production. They are thus in a position to earn wages.