A Common Application of the Cost Constraint Is I

question 125

Multiple Choice

A common application of the cost constraint is I. recording assets at cost.
II) not disclosing information that is immaterial and unnecessary in the notes.
III) use of the FIFO cost flow assumption for inventory valuation.

• A) I
• B) II
• C) III
• D) I and II

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Definitions:

Debits

These are entries on the left side of accounting records, used to increase asset or expense accounts or decrease liabilities, equity, or revenue accounts.

Credits

Accounting entries that increase liabilities or equity or decrease an asset or expense.

Common Shares

Shares of stock, which signify part ownership in a corporation, granting the holder the right to vote on corporate matters and to receive a portion of the company’s earnings via dividends.

Revenues

The cumulative income arising from transactions involving goods or services integral to a firm's primary business.