Which of the Following Accounting Policies Is an Example of Costs

question 62

Multiple Choice

Which of the following accounting policies is an example of costs versus benefits constraint being exercised in the disclosure of financial information?

• A)Inventory is valued at lower of cost or market.
• B)Property,plant and equipment are appraised and revalued every three years.
• C)Biological assets are stated at fair value unless the fair value cannot be measured reliably.
• D)Research and development costs are expensed as incurred.
• E)None of the given answers.

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Definitions:

Statute of Limitations

A law that sets the maximum time after an event within which legal proceedings may be initiated.

Proximate Cause

A principle in law that denotes the primary cause of an injury, used to establish the direct link between an act and the injury suffered.

Standard of Care

The degree of prudence, attention, and caution expected of a reasonable person in a specific situation, often used as a legal benchmark.

Foreseeable Damage

Refers to harm or loss that a reasonable person could anticipate under certain conditions in legal or contractual contexts.