Which of the Following Is Not a Generally Accepted Accounting

question 118

Multiple Choice

Which of the following is not a generally accepted accounting principle relating to the valuation of assets?

• A)The cost principle - in general,assets are valued at cost,rather than at estimated market values.
• B)The objectivity principle - accountants prefer to use objective,rather than subjective,information as the basis for accounting information.
• C)The safety principle - assets are valued at no more than the value for which they are insured.
• D)The going-concern assumption - one reason for valuing assets such as buildings and equipment at cost rather than at their current market values is the assumption that the business will use these assets rather than sell them.

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Definitions:

Monopolistic Competition

Monopolistic competition describes a market structure where numerous firms sell products that are similar but not identical, allowing for competition based on quality, brand, and price.

Long-Run Equilibrium

A state in a market where all factors of production and costs are variable, leading to no economic profit for firms in perfect competition.

Monopolistically Competitive

A market structure characterized by many firms offering products that are similar but not identical, allowing for some degree of market power.

Average Total Cost

Total cost divided by quantity of output produced. Also referred to as average cost.