The Cost/benefit Constraint Mentioned in the FASB Conceptual Framework Is

question 10

Multiple Choice

The cost/benefit constraint mentioned in the FASB conceptual framework is important in all areas of accounting. Which of the following is a cost that should be considered in many AIS tasks?

• A) Producing financial statements more quickly.
• B) Basing decisions on more accurate information.
• C) Considering the effects of decisions on human behavior.
• D) Memorizing the rules for preparing financial statements.

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Definitions:

Annual Income Statement

A financial statement that summarizes the revenues, costs, and expenses incurred over a fiscal year, showing the company's annual profit or loss.

Legal Fees Earned

Income recognized by law firms or attorneys for the provision of legal services.

Unearned Rent

Revenue received by a landlord for rent that has not yet been earned because the time period the rent covers has not yet passed.

Rent Revenue

Income earned from leasing out properties or real estate to tenants.