The Objectivity Concept Requires That

question 74

Multiple Choice

The objectivity concept requires that

• A) business transactions must be consistent with the objectives of the entity
• B) the Financial Accounting Standards Board must be fair and unbiased in its deliberations over new accounting standards
• C) accounting principles must meet the objectives of the Security and Exchange Commission
• D) amounts recorded in the financial statements must be based on independently verifiable evidence

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Definitions:

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs to production or manufacturing.

Cost of Goods

The total direct costs attributable to the production of goods sold by a company.

Manufactured

The process of making products from raw materials through various procedures including cutting, shaping, assembling, and finishing.

Schedule of Cost

A detailed report summarizing the types and amounts of costs incurred by a company.