Current Liabilities Are Normally Recorded at the Amount Expected to Be

question 3

Multiple Choice

Current liabilities are normally recorded at the amount expected to be paid rather than at their present value. This practice can be supported by GAAP according to the concept of:

• A) Matching.
• B) Consistency.
• C) Materiality.
• D) Conservatism.

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Definitions:

Industry Entry

The process of a new company or business beginning operations in a particular market or industry.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the true profitability of an enterprise.

Demand Schedule

A table that lists the quantity of a good that consumers are willing and able to purchase at various prices.

Marginal Revenue

The additional income earned by selling one more unit of a good or service.