Identify the Accounting Concept or Principle That Relates to the Statement

question 25

Multiple Choice

Identify the accounting concept or principle that relates to the statement in the following question: If a particular item is,by reason of its nature or its size,significant to a proper understanding of the situation,it should be separately stated.

• A) Relevance
• B) Faithful representation
• C) Materiality
• D) Comparability

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Definitions:

Variable Costing

A costing method that includes only variable production costs (materials, labor, and overhead) in the cost of goods sold and treats fixed overhead costs as period expenses.

Absorption Costing

Absorption costing is an accounting method that includes all of the manufacturing costs in the cost of a product, including both variable and fixed manufacturing overhead.

Produced

Refers to goods that have been completed through the manufacturing process and are ready to be sold or distributed.

Sold

The completed action of transferring ownership of goods or services to a buyer in exchange for payment.