Which of the Following Principles States That a Business Should

question 131

Multiple Choice

Which of the following principles states that a business should never anticipate gains?

• A)conservatism
• B)materiality concept
• C)disclosure principle
• D)consistency principle

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Definitions:

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders including those held by institutional investors and restricted shares held by insiders and company officers.

Market Price

The existing rate at which one can buy or sell an asset or service in the market.

Incremental Value

The additional value created by undertaking a specific action, project, or investment, compared to not doing so.

Shares Outstanding

The total number of shares that are currently owned by shareholders, including restricted shares owned by the company's officers and insiders as well as those held by the public.