Which of the Following Accounting Principles Prescribes That a Company

question 105

Multiple Choice

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

• A) Going-concern assumption.
• B) Matching principle.
• C) Cost principle.
• D) Business entity assumption.
• E) Consideration assumption.

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Definitions:

Average Cost

The cost calculated by dividing the total cost of goods available for sale by the total units available for sale.

Financial Advantage

A benefit or edge that contributes to a stronger financial position relative to competitors or within the marketplace.

Constraint

A limitation under which a company must operate, such as limited available machine time or raw materials, that restricts the company’s ability to satisfy demand.

Current Profitability

A measure of a company's financial performance in the current period, often assessed through margins or net income.