The Accounting Principle That Requires That the Cost Flow Assumption

question 58

Multiple Choice

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is

• A) called the expense recognition principle.
• B) called the consistency principle.
• C) nonexistent; that is there is no accounting requirement.
• D) called the physical flow assumption.

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Definitions:

Wood Pulp

A material prepared from wood by a chemical or mechanical process used in the production of paper and cellulose products.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price within a specified time period.

Quantity Demanded

the total amount of a good or service that consumers are willing and able to purchase at a given price in a specified period.

Fertilizer Cost

The expense associated with purchasing chemical or natural substances used to enhance plant growth and soil fertility.