The Cost Recovery Method

question 71

Multiple Choice

The cost recovery method

• A) is generally not acceptable
• B) recognizes gross profit before it has recovered all of the cost of the item sold
• C) is less conservative than the installment method
• D) is the preferred method under GAAP

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Definitions:

Negative Reinforcement

A process in behavior conditioning where a response or behavior is strengthened by stopping, removing, or avoiding a negative outcome or aversive stimulus.

Punishment

A consequence applied with the intention of reducing or eliminating an undesirable behavior by introducing a negative stimulus.

Operant Conditioning

A system of education where the level of a response is modified through reinforcement or deterrents.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus, leading to a learned response.