The Conceptual Framework of Accounting

question 111

Multiple Choice

The conceptual framework of accounting

• A) ensures that existing standards and practices are clear and consistent.
• B) makes it possible to respond quickly to new issues.
• C) increases the usefulness of the financial information presented in financial reports.
• D) all of the above.

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Definitions:

Special Order

A one-time order that is not considered part of the company’s normal ongoing business.

Opportunity Costs

The benefits a person or business foregoes by choosing one alternative over another.

Idle Capacity

Unused production capability within a manufacturing plant or business operation, often due to lack of demand or inefficiency.

Drop a Product

The decision by a company to cease the production and sale of a particular product.