Which Accounting Principle Is Designed to Prevent Abuses of Flexibility

question 3

Multiple Choice

Which accounting principle is designed to prevent abuses of flexibility in revenue recognition?

• A) Consistency principle
• B) Accrual principle
• C) Going concern principle
• D) Matching principle

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Definitions:

Supply Elasticity

Measures how the quantity supplied of a good responds to a change in the price of that good.

Market Supply Curve

A graphical representation of the quantity of goods and services that suppliers are willing and able to sell at various prices during a given period.

Complements

Goods or services that are used together, where the demand for one is increased when the price of the other decreases.