The Accounting Convention of Guides the Relative Sophistication of the Accounting

question 92

Multiple Choice

The accounting convention of guides the relative sophistication of the accounting system.

• A) conservatism
• B) materiality
• C) objectivity
• D) cost benefit

---

Definitions:

Cost of Goods Sold

Costs directly linked to the creation of goods that a company sells, encompassing both material and labor expenses.

Cash Paid

The actual amount of money disbursed for expenses, purchases, or liabilities.

Accounts Receivable

Funds that customers owe to a business for products or services already provided but not paid for.

Credit Sales

Sales made by a business where the customer is allowed to pay at a later date.