The Accounting Convention That Seeks to Reduce Personal Bias in Financial

question 36

Multiple Choice

The accounting convention that seeks to reduce personal bias in financial reports is the:

• A) objectivity convention.
• B) business entity convention.
• C) conservatism convention.
• D) dual aspect convention.

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Definitions:

Market Price

The existing cost for purchasing or selling an asset or service on the open market.

Purely Competitive Market

A market structure characterized by many buyers and sellers, all of whom sell identical products, which results in the agents having no control over prices.

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs.

Average Fixed Cost

Production costs that stay unchanged with output levels, split by the amount of produced output.