The traditional accounting model delays the recognition of value changes of assets and liabilities until what event occurs?
A) A change in value.
B) A market transaction.
C) A balance sheet date.
D) Cash is received or cash is paid.

Question

Quizplus · Accepted Answer

The traditional accounting model recognizes the value changes of assets and liabilities only when a market transaction occurs, such as when an asset is sold or a liability is paid off. This means that changes in value that occur outside of a transaction, such as changes in market conditions or the performance of the company, are not reflected in the financial statements until a transaction occurs.

The Traditional Accounting Model Delays the Recognition of Value Changes