Which of the Following Accounting Conventions Would an Accountant Most

question 139

Multiple Choice

Which of the following accounting conventions would an accountant most likely apply when facing major uncertainties?

• A) Full disclosure
• B) Conservatism
• C) Materiality
• D) Consistency

---

Definitions:

Operating Income

The profit realized from a business's operations, after deducting operating expenses like wages and cost of goods sold, but before interest and taxes.

Interest Expense

The cost incurred by an entity for borrowed funds, typically expressed as a yearly rate.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its debtors, typically used to assess the efficiency of a company's credit policies.

Credit Sale

A transaction where goods or services are provided to a customer with the agreement that payment will be made at a later date.