The Theory That a Business Firm Is a Collection of Individual

question 27

Multiple Choice

The theory that a business firm is a collection of individual owners who bind themselves together to share profits is known as _____

• A)entity theory
• B)aggregate theory
• C)concession theory
• D)conduit theory
• E)appropriation theory

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Definitions:

Realized Gain

is the profit made from selling an asset at a higher price than its purchase cost, officially recognized once the transaction is completed.

Fair Value

The value obtained for disposing of an asset or incurred in transferring a liability during a regulated deal among market entities on the date of measurement.

Net Income

The amount of profit left after all operating expenses, taxes, and interest are paid, indicating a company's financial performance over a specific period.

Spot Rate

The current market price at which a particular asset can be bought or sold for immediate delivery.