Which of the Following Statements Is True Concerning the Matching

question 83

Multiple Choice

Which of the following statements is true concerning the matching principle?

• A) All costs can be directly matched with revenue.
• B) All costs can be indirectly matched with periods in which they provide a benefit.
• C) The association of assets for a period with the liabilities necessary to generate the assets is known as the matching principle.
• D) Cost of goods sold matched with sales revenue is a classic example of direct matching under the matching principle.

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Definitions:

Defective Corporation

A corporation that has not completely complied with all legal requirements for incorporation, but may still operate as a corporation under certain conditions.

Shareholder Manager

A shareholder who also plays a direct role in the management of a company.

Passive Shareholder

An investor who holds a stake in a company but does not take part in day-to-day management or operational decisions.

Authorized Shares

Shares that a corporation is empowered to issue by its articles of incorporation.