Which of the Following Is a Primary Principle Involved in Conservatism

question 8

Multiple Choice

Which of the following is a primary principle involved in conservatism?

• A)It is each individual's responsibility to work and succeed.
• B)Failure to succeed generally is due to complex, unfair stresses and problems in the environment.
• C)It is the government's responsibility to support its citizens and help them cope with the stresses and problems in their environment.
• D)Social welfare is the collective responsibility of society.

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Definitions:

Residual Income

The income that remains after subtracting all the costs of capital from the net operating income.

Net Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profitability from operations.

Minimum Required Return

The minimum return that investors expect to earn from their investment.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity allowed for the actual output, multiplied by the standard price per unit of materials.