Which of the Following Principles States That a Business Should

question 47

Multiple Choice

Which of the following principles states that a business should not report anticipated gains?

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

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Definitions:

Work in Process

Work in Process (WIP) consists of goods that are in various stages of the production process but are not yet completed, reflecting both direct materials, direct labor, and applied overhead.

Actual Costs

The incurred expenses that a company has paid for manufacturing, operating, or producing goods and services.

Direct Labor Cost

The total cost of all the labor work directly involved in the production of goods or services.

Work in Process Inventory

Partially completed goods that are still in the production process at the end of a period.