When a Direct Cause-And-Effect Relationship Cannot Be Established Between Revenues

question 27

Multiple Choice

When a direct cause-and-effect relationship cannot be established between revenues and costs,the costs are

• A)not expensed and remain as assets on the balance sheet.
• B)expensed among the accounting periods that benefit from the costs.
• C)expensed immediately in their entirety.
• D)expensed equally each year.

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Definitions:

Liability Insurance

A type of insurance that covers injuries caused by the insured or injuries that occurred on the insured’s property.

Insured

Covered by insurance, offering protection against financial loss or damage.

Injuries

Physical harm or damage to the structure or function of the body caused by external force or trauma.

Health Plan

A contract or policy that provides financial coverage for medical services, often provided by employers or purchased by individuals.