The Conservatism Constraint Prescribes That

question 21

Multiple Choice

The conservatism constraint prescribes that:

• A)When multiple estimates of amounts to be received or paid in the future are equally likely,then the least optimistic amount should be used.
• B)A company use the same accounting methods period after period.
• C)Revenues and expenses are reported in the period in which they are earned or incurred.
• D)All items of a material nature are included in financial statements.
• E)All inventory items are reported at full cost.

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Definitions:

Cap and Trade

An environmental policy tool that sets a limit on emissions and allows businesses to buy and sell permits for a certain amount of emissions, encouraging reduction in pollution.

Sustainability Supply Chains

Supply chains designed and managed to meet current needs without compromising the ability of future generations to meet their needs, focusing on environmental, social, and economic sustainability.

Cap and Trade

An environmental policy tool that sets a limit (cap) on emissions and allows entities to buy and sell permits for emissions under that cap.

Carbon Tax

A fee imposed on the burning of carbon-based fuels, intended to reduce greenhouse gas emissions and combat climate change by making such fuels more expensive.