When a Firm Sells Its Good Abroad Below the Cost

question 278

Multiple Choice

When a firm sells its good abroad below the cost of producing the good the firm is

• A) using the concept of comparative advantage.
• B) dumping.
• C) taking advantage of the infant industry argument.
• D) taking advantage of absolute advantage.

---

Definitions:

Consolidated Financial Statements

Financial statements that combine the financial information of a parent company with its subsidiaries, presenting it as if the group is a single entity.

Entity Principle

The Entity Principle is an accounting concept stating that a business must be accounted for separately from its owner or any other business entity.

Revenues Earned

Income that has been generated from business activities and is recognized once the service has been provided or the goods have been delivered.

FASB Suggestion

Recommendations or guidance offered by the Financial Accounting Standards Board, which sets accounting principles in the United States.