Recognition in Accounting Means

question 40

Multiple Choice

Recognition in accounting means

• A) recognizing the difference between assets and liabilities.
• B) recognizing the difference between income and expenses.
• C) recognizing that initially transactions are recorded at fair value.
• D) the process of recording a transaction in the accounting records.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members from its profits or reserves.

Return on Equity

An indicator of a company's financial performance, indicating the amount of profit generated from the investments made by its shareholders.

Gross Profit Percentage

A financial metric that shows the portion of sales revenue that exceeds the cost of goods sold (COGS), expressed as a percentage of total sales revenue.

Net Profit Margin

A profitability ratio that measures the percentage of net income generated from total revenue, indicating the efficiency of a company in managing its operations and expenses.