Which of the Following Is True About the Cost Principle

question 86

Multiple Choice

Which of the following is true about the cost principle?

• A) It limits the economic data recorded in an accounting system to data related to the activities of that company.
• B) It initially records assets in the accounting records at their purchase price.
• C) It assumes that a company will continue in business indefinitely.
• D) It reports the revenues earned by a company for a period with the expenses incurred in generating the revenues.

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Definitions:

Conscious Experience

The awareness of internal or external existence, encompassing thoughts, feelings, and sensations.

General Bodily Arousal

A state of physical and psychological alertness, typically involving increased heart rate and energy, often as a response to stimuli or stress.

Specific Emotion

A distinct feeling that arises in response to a particular event or circumstance, identifiable by its unique psychological and physiological patterns.

Stanley Schachter

An American psychologist best known for his development of the two-factor theory of emotion, which considers both physiological arousal and cognitive labeling.