A Company That Produces Drugs Is Preparing a Balance Sheet

question 82

Multiple Choice

A company that produces drugs is preparing a balance sheet. Which of the following would be most likely to be considered a long-term asset on this balance sheet?

• A) commercial paper held by the company
• B) the inventory of chemicals used to produce the drugs made by the company
• C) a patent for a drug held by the company
• D) the cash reserves of the company

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Definitions:

Adverse Selection

A situation in which one party in a transaction has more information than the other, typically leading to an inefficient market outcome.

Health Care Costs

The expenses related to maintaining the health of individuals, including medical services, medications, and treatments.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a given period of time.

Health Care Expenditures

The total amount of money spent by individuals, insurance companies, and governments on health care services and products.