The Elimination Principle

question 19

Multiple Choice

The elimination principle:

• A)holds in all places and in all times.
• B)says that below-normal profits may be eliminated by the entry of new firms.
• C)depends on government protection.
• D)says that above-normal profits are eliminated by entry and below-normal profits are eliminated by exit.(True Answer
• )Correct

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Definitions:

Fair Presentation

An accounting principle that financial statements should be honest, complete, and conform to accepted standards, providing a true and accurate view of an entity's financial position.

Unbiased

Free from prejudice or favoritism, ensuring fair, impartial, and objective decision-making or presentation.

Changes in Equity

Adjustments in a company's equity over a period due to earnings, losses, dividends, and other capital changes.