The Assumption That Requires That Only Those Things That Can

question 9

Multiple Choice

The assumption that requires that only those things that can be expressed in money are included in the accounting records is the

• A)economic entity assumption.
• B)monetary unit assumption.
• C)going concern assumption.
• D)periodicity assumption.

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Definitions:

Contribution Margin Ratio

The percentage of revenue that exceeds variable costs, indicating the proportion of sales that contributes to fixed costs and profits.

Break-Even Point

The production level or sales volume at which total revenues equal total costs, resulting in zero profit.

Degree Of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales.

Contribution Format

A financial statement format that separates fixed costs from variable costs to highlight the contribution margin of products or services.