Which of the Following States That a Business Must Report

question 1

Multiple Choice

Which of the following states that a business must report enough information for outsiders to make knowledgeable decisions about the company?

• A) Accounting conservatism
• B) Materiality concept
• C) Disclosure principle
• D) Consistency principle

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Definitions:

Marginal Revenue

The additional income generated from selling one more unit of a product or service.

Marginal Cost

The rise in expense associated with manufacturing an extra unit of a product or service.

Shut Down

A short-term decision by a company to cease operations temporarily due to unfavorable market conditions or to minimize losses when variable costs exceed total revenues.

Maximizes Profit

The strategy or process implemented to increase the difference between total revenue and total costs to the highest possible amount.