Which of the Following Guidelines Should Be Applied When Choosing

question 71

Multiple Choice

Which of the following guidelines should be applied when choosing an account name to be included in the chart of accounts?

• A)Account names should identify the nature and content of each account.
• B)Account names should be used consistently.
• C)Account names should use titles and not explanations.
• D)All of the above are correct.

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Definitions:

Horizontal Merger

A business consolidation that occurs between firms operating in the same industry or producing similar products or services.

Diversification

Investment in more than one asset; returns do not move proportionally in the same direction at the same time, thus reducing risk.

Acquisition

The process of taking control of another company either by purchasing its shares or assets.

Complementary Resources

Resources that, when used in conjunction with another, enhance each other's value or productivity.