A Broad Principle That Requires Identifying the Activities of a Business

question 163

Multiple Choice

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters or years is the:

• A)Operating cycle of a business
• B)Time period principle
• C)Going-concern principle
• D)Matching principle
• E)Accrual basis of accounting

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Definitions:

Contribution Margin

The selling price per unit, minus the variable cost per unit, indicating how much of each sale contributes to covering fixed costs.

Rapidly Changing Technology

Rapidly changing technology refers to the swift advancement in technological innovations and developments that can significantly affect industries and markets.

Soft Rationing

The limitation of capital due to internal policies of a company, not directly involving actual shortages or external financial conditions.

Stockholders

Individuals or entities that own equity shares in a corporation, giving them certain rights and privileges, such as the right to dividends.