Some Companies Choose to Avoid Assigning Incidental Costs of Acquiring

question 125

Multiple Choice

Some companies choose to avoid assigning incidental costs of acquiring merchandise to inventory by recording them as expenses when incurred. The argument that supports this is called:

• A) The matching principle.
• B) The materiality constraint.
• C) The cost principle.
• D) The conservation constraint principle.
• E) The lower of cost and net realizable value.

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Definitions:

Foreign Policy

A government's strategy in managing its relationships with other nations, concerning diplomacy, trade, and national security.

Soviet Union

A former socialist state that existed from 1922 to 1991, officially known as the Union of Soviet Socialist Republics (USSR), comprised of Russia and several other republics.

Collapse

Collapse refers to a sudden failure or downfall of a structure, system, economy, or society, often resulting from internal weaknesses or external pressures.

Human Rights Violations

Acts which transgress against the basic human rights enshrined in international law, such as freedom of speech, right to live, and right to education.