The Accounting Principle That Requires Financial Statement Information to Be

question 188

Multiple Choice

The accounting principle that requires financial statement information to be based on costs incurred in business transactions,and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

• A) Accounting equation.
• B) Cost principle.
• C) Going concern principle.
• D) Revenue recognition principle.
• E) Business entity principle.

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Definitions:

Protective Tariff

A tariff imposed on imports to protect domestic industries from foreign competition by increasing the cost of imported goods, thereby making local goods more competitively priced.

American Colonies

Refers to the thirteen British colonies in North America that declared independence in 1776, leading to the American Revolutionary War and the formation of the United States.

Spain

A country located on the Iberian Peninsula in Europe, known for its rich history, cultural diversity, and significant contributions to art, literature, and global exploration.

Puerto Rico

A Caribbean island and unincorporated U.S. territory with a rich cultural history and diverse heritage.