Tom, the Manager and Owner of a Small Company, Believes

question 34

Multiple Choice

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, Tom would be most likely to agree with which of the following quotes?

• A)"We encourage our employees to enroll in night classes to improve their on-the-job productivity."
• B)"We encourage our employees to participate in online seminars to learn new skills."
• C)"We pay higher wages to employees who have MBAs because, on average, their job performance is better than similar employees who do not have MBAs."
• D)"When we interview prospective employees at job fairs, we are looking for college graduates because they have the determination and follow-through to finish what they start."

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Definitions:

Physical Inventory Count

A physical inventory count is the manual process of counting all the goods a company physically has on hand at a specific time to verify stock records and values.

First-In, First-Out

An inventory valuation method where the goods first produced or acquired are sold or used first, presuming that the oldest inventory items are consumed before newer ones.

Ending Inventory

The value of goods available for sale at the end of an accounting period, after purchases and sales have been accounted for.

Average Cost Formulas

A method used in accounting to calculate the cost of goods sold and ending inventory by averaging the cost of all items available for sale during the period.