What Is the Likely Result When Accounting Rules Are Left

question 12

Multiple Choice

What is the likely result when accounting rules are left up to professional associations rather than being legislated by governmental bodies?

• A) Very general accounting rules are created, as in code law countries.
• B) Very detailed rules for practice are created, as in common law countries.
• C) Very general accounting rules are created, as in common law countries.
• D) Very detailed rules for practice are created, as in code law countries.

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Definitions:

Comparative Advantage

is the economic theory that a country should specialize in producing and exporting goods and services for which it has the lowest opportunity cost.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Marginal Costs

The additional cost incurred when producing one more unit of a particular good or service.

Trading Partner

A country or organization that engages in import or export transactions with another entity, indicating a regular commercial relationship.