The Assumption That the Unit of Measure Remains Sufficiently Constant

question 238

Multiple Choice

The assumption that the unit of measure remains sufficiently constant over time is part of the

• A) economic entity assumption.
• B) cost principle.
• C) historical cost principle.
• D) monetary unit assumption.

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Definitions:

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in non-cash working capital and non-operating items to determine cash flow from operating activities.

Operating Activities

Tasks and transactions related to the core business functions of a company, such as selling products and providing services, integral to generating revenue.

Direct Method

A costing method that directly allocates service department costs to producing departments without any intermediate allocation steps.

Operating Activities

Refers to the primary revenue-generating activities of a business, typically including sales, service delivery, and associated costs.