The Most Important Accounting Problem in Dealing with Merchandise Inventory

question 17

Multiple Choice

The most important accounting problem in dealing with merchandise inventory is the application of which of the following conventions or rules?

• A)Materiality
• B)Full disclosure
• C)Matching
• D)Conservatism

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Definitions:

Undue Influence

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party.

Threats

Expressions or actions indicating an intention to cause harm or force someone to do something against their will.

Reliance

The act of depending or counting on something or someone, often used in legal contexts to describe a situation where one party bases a decision on the assurances or promises of another.

Misrepresentation

The act of providing false or misleading information with the intent to deceive someone into entering into an agreement.