The Recognition of Cost of Goods Sold as an Expense

question 138

Multiple Choice

The recognition of cost of goods sold as an expense in the same period that sales revenue is recognized from the sale of merchandise is a good example of the

• A)matching principle.
• B)full disclosure principle.
• C)revenue realization principle.
• D)historical cost principle.

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Definitions:

Social Responsibility Pyramid

A model describing the layers of responsibility that companies have, ranging from economic, legal, ethical, to philanthropic duties.

Obligation

A duty or commitment that one is bound to, legally or morally, which often involves completing certain actions or adhering to agreements.

Social Responsibility

The idea that businesses should balance profit-making activities with activities that benefit society; it involves developing businesses with a positive relationship to the society in which they operate.

Positive Impact

The beneficial effect that one's actions or policies have on individuals, communities, environments, or markets.