What Term Is Used to Refer to the Decision About

question 34

Multiple Choice

What term is used to refer to the decision about whether to report an item in the financial statements?

• A) Capitalization
• B) Recognition
• C) Realization
• D) Conservatism

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Definitions:

Subcontracting Cost

Expenses incurred when a company hires external suppliers or service providers to perform certain tasks or functions that are part of the production process.

Stockout Cost

The financial impact associated with running out of stock, including lost sales, backorder processing, and customer dissatisfaction.

Inventory Holding Cost

The expenses associated with storing unsold goods, including warehousing, insurance, and spoilage costs.

Yield Management Principles

Strategies used in revenue management to adjust prices and inventory in response to demand, in order to maximize revenue or yield.