Which of the Following Is an Indicator That an Organization

question 59

Multiple Choice

Which of the following is an indicator that an organization is too large and decentralized?

• A)fewer product innovations
• B)high labor costs relative to other organizational expenses
• C)excessive organizational rules and regulations
• D)heterogenous product lines
• E)poor customer relationships

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Definitions:

Goodwill Impairment

A charge that companies record when the book value of goodwill on their balance sheets exceeds its estimated fair value, indicating the asset has decreased in value.

Recoverable Amount

The higher of an asset's fair value less costs of disposal and its value in use, reflecting the estimated amount that can be realized from the asset.

Carrying Value

The book value of an asset on a company’s balance sheet, calculated as the original cost minus accumulated depreciation or amortization.

Equity Method

An accounting method used to assess the investments in associate companies where the investor has significant influence but does not control the company outright.