The Body of Theory Underlying Accounting Is Not Based on

question 107

Multiple Choice

The body of theory underlying accounting is not based on

• A) physical laws of nature.
• B) concepts.
• C) principles.
• D) definitions.

---

Definitions:

Money Multiplier

A factor that quantifies the amount of additional money that can be created in a bank's lending process for a given amount of reserves.

Excess Reserves

Excess reserves are the capital reserves held by a bank or financial institution in excess of what is required by regulators, central bank, or other financial authority.

Opportunity Cost

Missing out on potential opportunities from different choices when opting for a single alternative.

Holding Money

The act of keeping money in cash or in very liquid assets to facilitate transactions or as a precaution against uncertainties.