The Accounting Convention of _____ Guides the Relative Sophistication of the Accounting

question 84

Multiple Choice

The accounting convention of _____ guides the relative sophistication of the accounting system.

• A)objectivity
• B)cost benefit
• C)conservatism
• D)materiality

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Definitions:

Variable Expenses

Expenses that change in proportion to the activity of a business, such as sales commissions that rise with increased sales or materials costs that rise with increased production.

Discontinue Product

The decision to stop manufacturing, selling, or supporting a product based on criteria such as sales performance, profitability, or strategic alignment.

Open Market

A market with few restrictions on buy-sell transactions, allowing for free competition and prices dictated by supply and demand.

Surplus Material

Excess materials that are left over after the production process or not used within an operation.