According to Economic Growth Theory, If the Spread of Technology

question 131

Multiple Choice

According to economic growth theory, if the spread of technology is not difficult, we would expect

• A)countries with lower productivity to adopt newer technology and raise their productivity.
• B)countries with high levels of income per capita to continue growing faster than countries with low incomes per capita.
• C)the elimination of diminishing returns to labor.
• D)an increase in the diminishing returns to capital.
• E)the elimination of diminishing returns to capital.

Understand and explain the concept of intra-entity transfers within consolidated financial statements.

Calculate the elimination amount for sales between parent and subsidiary companies.

Describe how intra-entity gross profit on a transfer of inventory is treated on a consolidation worksheet.

Comprehend the adjustments to depreciation expense within the consolidation process for intra-entity transfers of a depreciable asset.

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Definitions:

Net Method

An accounting practice where discounts for early payment are assumed to be taken and purchase or sale transactions are recorded at the net, discounted amount.

Periodic Inventory Method

An accounting method where the inventory is physically counted at specific intervals and the cost of goods sold is calculated afterwards.

Merchandise Purchase

Transactions related to buying goods for sale, typically finished goods, in a retail or wholesale setting.

Credit Terms

The conditions under which credit is extended by a seller to a buyer, detailing the repayment period, discount for early payment, and the annual interest rate if applicable.