Which of the following most exemplifies the value-added principle?
A) An ongoing process where continuous improvement is the goal.
B) A competitive management program that emphasizes quality.
C) Information gathering and reporting activities should be restricted to those activities that add value in excess of their cost.
D) Managerial accounting information is measured in economic, physical, and financial terms.

Question

Quizplus · Accepted Answer

The value-added principle states that activities or processes that add value in excess of their cost should be pursued, and those that do not should be eliminated or minimized. Option C best exemplifies this principle by stating that information gathering and reporting activities should only be pursued if they add value in excess of their cost. Option A talks about continuous improvement, but does not specifically mention adding value. Option B emphasizes quality, but again does not explicitly mention adding value. Option D talks about measuring managerial accounting information in different terms, but does not relate to the value-added principle.

Which of the Following Most Exemplifies the Value-Added Principle