Exhibit 14-1

question 61

Multiple Choice

Exhibit 14-1
-Which of the following is indicated in Exhibit 14-1?

• A) Rubber is cheaper to produce than tires.
• B) The total cost of producing 100,000 tires is greater than the total cost of producing 200,000 tires.
• C) The minimum efficient scale of producing rubber is 4 million pounds.
• D) The minimum efficient scale of producing tires is greater than 200,000 tires.
• E) The marginal cost of the 200,000th tire must exceed the average cost of 200,000 tires.

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Definitions:

Outstanding Checks

Checks that have been written and recorded in the accounting records but not yet cleared or cashed by the bank.

Double Payment

A financial error where a payment is mistakenly sent or processed twice for the same invoice or obligation.

Checks Cleared

The process by which banks settle transactions, transferring money from the check writer's account to the beneficiary's account once the check is presented for payment.

Bank Reconciliation

The practice of aligning and scrutinizing numbers from financial records with the ones on a bank statement to guarantee they match.