During the Lifetime of an Entity, Accountants Produce Financial Statements

question 26

Multiple Choice

During the lifetime of an entity, accountants produce financial statements at arbitrary points in time in accordance with which basic accounting concept?

• A) Cost constraint
• B) Periodicity assumption
• C) Conservatism constraint
• D) Expense recognition principle

---

Definitions:

Accounts Payable

Liabilities of a business that are due to suppliers and creditors for goods, services, or supplies purchased on credit but not yet paid for.

Restricted Fund Method

An accounting approach used for reporting funds that have restrictions placed on them by donors or grantors.

Deferral Method

An accounting technique that postpones the recognition of income or expenses until a future date.

Revenue Level

The total amount of income generated from the sale of goods or services before any costs or expenses are deducted.