Identify the Accounting Concept or Principle That Relates to the Statement

question 40

Multiple Choice

Identify the accounting concept or principle that relates to the statement in the following question: Information should have predictive value and/or feedback value.

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

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Definitions:

Unit Product Cost

The total expense incurred to produce, manufacture, or acquire a single unit of a product, including direct labor, materials, and overhead costs.

Year 1

The first year in a given time period, often used as a baseline for analysis in financial contexts or project planning.

Variable Costing

An accounting method that considers only variable production costs (materials, labor, and overhead) in the cost of goods sold and excludes fixed costs.

Operating Loss

This occurs when a company's operating expenses exceed its gross profits, indicating that the business operations are not profitable.