The Accounting Convention That Means Only Those Transactions That Are

question 63

Multiple Choice

The accounting convention that means only those transactions that are capable of being expressed in monetary terms are recorded, is the:

• A)money measurement convention.
• B)historical cost convention.
• C)conservatism convention.
• D)reliability convention.

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Definitions:

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and government entities.

GAAP

Generally Accepted Accounting Principles (GAAP) are a set of rules and standards used in the United States for financial reporting, providing guidelines on how financial statements should be prepared and disclosed.

IRS

The Internal Revenue Service, a U.S. government agency responsible for tax collection and enforcement of tax laws.

Installation Costs

Expenses associated with setting up equipment or assets so that they are ready to be used in operations.