Explain the Law of Comparative Advantage.
What will be an ideal response?
The Law of Comparative Advantage asserts that with trade, each country will find it favorable to specialize in the production of the good of its comparative advantage and will trade part of this for the good of its comparative disadvantage. Taking advantage of specialization can result in production gains.
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Cory Harper, a newly hired accountant, wanted to impress his boss, so he stayed late one night to analyze the office supplies expense account. He determined the cost by month, for the past 12 months, of each of the following: computer paper, copy paper,
fax paper, pencils and pens, note pads, postage, corrections supplies, stationery, and miscellaneous items. Why do companies not include information of this nature in published financial statements?
Which of the following statements is not true?
a. The accounting system does not measure all aspects of operating a business; b. Financial statement analysis has limitations; c. Generally accepted accounting principles allow different methods of accounting for similar events; d. For security reasons, companies do not have to disclose any of the accounting methods they use; e. In ratio calculations, the numerator or the denominator used can cause a ratio to provide a distorted message.
The journal voucher is the document that authorizes entries to be made to the general ledger
Indicate whether the statement is true or false
The most important financial factor in determining whether it is better to rent or buy is the length of the holding period
Indicate whether the statement is true or false.c