Which of the Following Accounting Concepts States That Before a Transaction

question 135

Multiple Choice

Which of the following accounting concepts states that before a transaction is recorded, sufficient evidence must exist to allow two or more knowledgeable individuals to reach essentially the same conclusion about the transaction?

• A) Continuity assumption
• B) Separate entity assumption
• C) Cost principle
• D) Reliability quality
• E) Materiality constraint

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Definitions:

Market Penetration

A gauge of the level of sales or acceptance of a product or service in relation to the complete potential marketplace for it.

Diversification

The strategy of adding varied products, services, or markets to a company's portfolio to spread and reduce risks.

Diversification Analysis

A strategic approach used by businesses to expand their operations by entering into new markets or developing new products, often to mitigate risks associated with over-reliance on a single revenue stream.

R&D-Manufacturing Efficiencies

Improved productivity and innovation resulting from close coordination between research and development (R&D) and manufacturing processes.