The General Accounting Standards for Recognition and Measurement of Accounts

question 57

Multiple Choice

The general accounting standards for recognition and measurement of accounts receivable include

• A) measuring the receivable initially at amortized cost.
• B) measuring the receivable initially at fair value.
• C) after initial recognition, measuring the receivable at fair value.
• D) not recognizing the receivable until it is paid.

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Definitions:

Mark-Up Percentage

The percentage added to the cost price of goods to cover overhead and profit in the selling price.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Sales Volume

The number of units of a product or service sold in a specific period of time, indicative of consumer demand and business performance.

Demand Elastic

Refers to the degree to which demand for a good or service varies with its price. High elasticity indicates demand changes significantly with price changes, while low elasticity indicates little to no change.