Which of the Following Accounting Principles Is Concerned with Offsetting

question 89

Multiple Choice

Which of the following accounting principles is concerned with offsetting revenue with the expenses incurred in producing that revenue?

• A) Recognition principle.
• B) Materiality.
• C) Matching.
• D) Depreciation.

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Definitions:

Return on Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit from an investment by the cost of the investment.

Capital Budgeting

The process businesses use to evaluate and select long-term investments such as new machinery, replacement machinery, new plants, new products, and research development projects.

Time Value

The concept that money available at the present time is worth more than the identical sum in the future due to its potential earning capacity.

Soft Capital Rationing

Internal limitations set by a company's management on the amount of funding allocated for new projects.