Under Generally Accepted Accounting Principles, a Company Can Choose a Cost

question 2

Multiple Choice

Under generally accepted accounting principles, a company can choose a cost flow assumption for valuing cost of goods sold that can result in different income measurement. However, it can't frequently change the cost flow assumption adopted in order to measure the highest income possible because of the:

• A) conservativism principle.
• B) going concern principle.
• C) stable-dollar principle.
• D) consistency principle.

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Definitions:

Transfer Price

The price at which goods or services are traded between departments or subsidiaries within the same organization.

Selling Division

The segment of a company responsible for selling products or services, often considered in transfer pricing situations.

Transfer Price

The price charged for goods and services sold between departments or subsidiaries of the same company.

Detector Division

A specialized unit within a company focused on detecting and analyzing specific types of information or signals.