The Basic Accounting Concept That Refers to the Tendency of Accountants

question 13

Multiple Choice

The basic accounting concept that refers to the tendency of accountants to resolve uncertainty in favor of understating assets and revenues and overstating liabilities and expenses is known as the

• A)conservatism constraint.
• B)materiality constraint.
• C)substance over form principle.
• D)industry practices constraint.

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Definitions:

Mark-Up Percentage

The percent difference between the cost of a good or service and its selling price, used to calculate the selling price from the cost.

Contribution Margins

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Labour Hours

The total number of hours worked by employees, used for measuring productivity or calculating costs.

Product Mix

The variety of products that a company offers for sale, which can affect its market position and profitability.