The Due Care Principle in the AICPA Code

question 18

Multiple Choice

The due care principle in the AICPA code:

• A) Addresses the quality of the individual who performs professional services
• B) Addresses the quality of services performed by the CPA
• C) Addresses whether the independence standards have been met
• D) Addresses whether integrity and objectivity have been compromised

---

Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs, used to cover fixed costs and contribute to profit.

Incremental Manufacturing Cost

The additional costs incurred to produce an additional unit of product, including materials, labor, and overheads.

Product Costs

Product costs are the costs directly associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to the production of goods, such as administrative and selling expenses, and are expensed in the period they are incurred.